Taxation in the Public Sector: Analysis of Effectiveness, Contribution, and Strategies for Strengthening Regional Tax Revenue in Binjai City

Abstract

This study aims to analyze the condition of taxation in the public sector, especially regional taxes, in Binjai City, North Sumatra Province, by highlighting the level of effectiveness of collection, its contribution to Regional Original Revenue (PAD), as well as factors that affect taxpayer compliance and efforts to digitize tax services. The research uses a qualitative descriptive approach with secondary data derived from the Binjai City Regional Revenue and Expenditure Budget (APBD) realization report, documents from the Binjai City Regional Finance, Revenue, and Asset Management Agency (BPKPAD), as well as literature reviews from journal articles published in the last five years. The results of the study show that the realization of Binjai City's regional taxes in 2024 will only reach around 56.4 percent of the set target, so the level of effectiveness is classified as not optimal, although the contribution of regional taxes to PAD remains in a fairly good category. Factors such as low taxpayer awareness, limited supervision resources, not optimal service digitization system, and the determination of tariffs that are considered disproportionate for micro business actors are the main reasons why these targets have not been achieved. This study recommends strengthening taxpayer databases, expanding digital-based tax services, and reviewing tariff policies to be more fair, as a strategic step to increase Binjai City's regional tax revenue in the future.