ANALISIS KAUSALITAS PENERIMAANPAJAK DAN PENGELUARAN PEMERINTAH(Studi Kasus Pemerintah Kota di Provinsi JawaTengah)
Fiscal policy is an action taken by the government in the field of state
governement budget wich is related to tax revenue and government expenditure
In the framework of the implementation of fiscal decentralization, there is the
giving task and authority to local governments which means that the local
government has the right to regulate their tax revenue and expenditure. The
greater amount of tax that government received will result in increased revenues
to finance government expenditure, and conversely. It basically gives
the understanding that discussion of tax revenues closely related to government
expenditure.
This research aims to analyze the causality relationship between tax
revenues and government expenditure on the cities of Central Java Province
during 2001-2014. This research uses Granger Causality Test. Types of data used
in this research is secondary data and panel. The data obtained from
the Directorate General of Financial Equalization.
The result showed that there is unidirectional causality from tax revenues
to the government expenditure on the cities of Central Java Province. This result
support tax-spend hypothesis explained by Friedman (1978) that government
expenditure will adjust by tax revenues.