THE EFFECT OF IPAK, REGIONAL GDP PER CAPITA, UNEMPLOYMENT RATE, AND HUMAN DEVELOPMENT INDEX ON THE TAX RATIO IN INDONESIA FOR THE 2020–2024 PERIOD

Abstract

This study aims to analyze the influence of the Anti-Corruption Behavior Index (IPAK), Regional Gross Domestic Product (GRDP) per capita, unemployment rate, and Human Development Index (HDI) on the tax ratio across 34 provinces in Indonesia over the period 2020–2024. The tax ratio is a key fiscal performance indicator; however, Indonesia’s tax ratio remains relatively low compared to its economic potential and the regional average of Asia-Pacific countries.This study employs a quantitative approach using panel data comprising 34 provinces over 5 observation years (2020–2024), yielding a total of 170 observations. The analysis utilizes panel data regression with the Fixed Effect Model (FEM), selected based on the results of the Chow Test and Hausman Test. Data were obtained from the Central Bureau of Statistics (BPS), the Ministry of Finance, and the Corruption Eradication Commission (KPK).The results indicate that, partially, the unemployment rate has a significant negative effect on the tax ratio, meaning that higher unemployment leads to lower tax revenue. Meanwhile, IPAK and GRDP per capita have a positive but insignificant effect on the tax ratio, while HDI has a negative but insignificant effect. Simultaneously, all four variables jointly exert a significant influence on the tax ratio in Indonesia. An Adjusted R-Squared value of 0.7313 indicates that 73.13% of the variation in the tax ratio is explained by the four variables in the model.This study recommends that the government focus on creating quality employment in the formal sector, improving the effectiveness of tax administration, broadening the tax base, and enhancing human resource quality through education, healthcare, and economic empowerment programs, in order to sustainably improve the tax ratio.