OPTIMIZING LOCAL OWN-SOURCE REVENEU THROUGH HOTEL AND RESTAURANT TAX SECTOR IN MALANG CITY DURING COVID-19 PANDEMIC

1 OPTIMIZING LOCAL OWN-SOURCE REVENEU THROUGH HOTEL AND RESTAURANT TAX SECTOR IN MALANG CITY DURING COVID-19 PANDEMIC

Awalludzin Kusuma Narapraja Ayu Fury Puspita, SE., M.S.A., Ak

Faculty of Economics and Business, University of Brawijaya Email : kawalludzin@yahoo.com

ABSTRACT

This research aims to find out the policy of optimizing Local Own-Source Revenue in Malang City through Hotel and Restaurant Tax Sector in Malang City during Covid-19 Pandemic. In this research, the researcher took role as the instrument in data collection. The method used in this research was qualitative descriptive and the data used were data of Local Own-Source Revenue of Malang City in 2016-2020 and the data of hotel and restaurant tax gain in 2016-2020. From the results of this research, some findings were found such as first, there is decrease of Local Own-Source Revenue gain in Malang City from 2019 to 2020, especially in Hotel and Restaurant tax sector. Second, there is decrease of hotel and restaurant tax sector because of hotel and restaurant closing caused by Covid-19 pandemic. Third, the government of Malang City and Malang City Revenue Agency made policy of alleviating the hotel and restaurant business owners impacted by Covid-19 pandemic. Overall, Local Own-Source Revenue of Malang City is still not optimized maximally yet.

Keywords: Optimizing Local Own-Source Revenue, Hotel Tax, Restaurant Tax

BACKGROUND

Regional Tax is one of the important sources of Regional Original Income. Just as in Malang City which has many tourist attractions and as a student city visited by students from outside the region, this makes income from Regional Taxes high potential to increase Regional Original Income. The Regional Tax obtained by the City of Malang in 2019 amounted to Rp.

460,093,075, providing 68% of revenue to the Regional Original Income. On February 1, 2020, prior to COVID-19 in Malang City, the Regional Revenue Agency (BAPENDA) of Malang City targeted local tax revenues to reach Rp. 621 billion, an increase of about 23% from the previous year which received local taxes of Rp. 501 billion. The targets given in previous years were always realized and exceeded the targets set.

However, the presence of COVID-19 which affects all business sectors also affects local tax revenues. The Regional Revenue Agency (BAPENDA) targets only IDR 272 billion, which is 50% of the planned Regional Original Revenue and is reduced by levies and other legitimate income. There are several types of local taxes in Malang, including Hotel Tax, Restaurant Tax, Entertainment Tax, Advertising Tax, Street Lighting Tax, Parking Tax and Ground Water Tax.

The largest sources of local taxes, respectively, are hotel taxes with revenues of Rp. 64.71 billion in 2018, followed by street lighting taxes of Rp. 58.55 billion, hotel taxes with revenues of Rp. 46.88 billion, entertainment taxes of Rp. 25, 5 billion, and the lowest groundwater tax is Rp 909 million.

2 Tax revenues which are one of the sources of regional wealth disappeared during the COVID-19 pandemic. Hotel taxes and restaurant taxes were directly or indirectly affected by this pandemic, how could they not, all hotels and restaurants in Malang City had to close their business because there is a large-scale social restriction (PSBB) policy implemented by the government, there is no economic activity from these two sectors, of course this will greatly affect the tax revenue. Many hotels and restaurants closed their outlets, cut off their employees, and quickly changed the economic structure of Malang City. Various efforts were made by the government to overcome this problem, until on May 30, 2020 the Large-Scale Social Restrictions (PSBB) officially stopped, a seven-day transition period began and continued with a new normal period, where the economy began to rise little by little, as well as with hotels and restaurants, but with receiving visitors or guests only 50% of the quota when there is no pandemic.

The policy was taken to restore the economy of the community. The government makes various policies in terms of taxation, such as the Stimulus package. The Stimulus Package is a step in supporting the tourism industry. The Central Government has decided to provide incentives to the tourism industry due to the impact of the corona virus, in the form of a 50%

discount on flight tickets to 10 selected tourist destinations, another incentive is the abolition of hotel and restaurant taxes in the 10 tourist destinations. Malang is one of the 10 tourist destinations imposed in the policy. Malang City Government abolished hotel and restaurant taxes in accordance with the stimulus package to overcome the corona virus outbreak, provided that the amount of grant funds was given according to the initial assumptions. The elimination of hotel and restaurant taxes for six months to respond to the impact of the Corona virus is projected to begin in April 2020.

Besides Malang City, new policies regarding taxation were also implemented in various regions including, in Pasuruan Regency, local taxes were not abolished, but were replaced with a policy of providing opportunities for taxpayers to pay taxes late without any administrative witnesses or fines being charged. This policy was implemented in April 2020. This policy was made due to the land and building tax that has not been received amounting to Rp 100 billion.

The hope of the Pasuruan Regency Government with this policy is that taxpayers make payments for taxes that have not been paid and ease the tax burden a little due to the corona virus. Different tax policies are also applied by the Government of Kediri City, which promises to exempt hotel taxes, restaurant taxes and entertainment taxes, provided that business actors do not terminate employment relations with employees. Meanwhile, the Probolinggo City DPRD Commission II provides suggestions for making policies regarding the collection of regional taxes and levies. This is done in the hope of providing a stimulus to MSME actors.

This policy is also in line with President Joko Widodo's statement regarding MSMEs that can defer taxes or relax credit.

From the various reviews above, it can be seen that the COVID-19 pandemic has had a major impact on the economy, especially in the taxation sector, tourism, hotel and restaurant service sectors, therefore researchers are interested in conducting a research entitled

"Optimizing Regional Original Income through the Sector. Hotel Tax and Restaurant Tax in Malang City During the Pandemic Period.”

3 LITERATURE REVIEW

Regional Income

Regional Original Revenue (PAD) is the original income derived from the utilization and exploration of the potential owned by the region. Entering the era of regional autonomy, regions have the right to determine their own households, and regions are required to be able to create alternatives and innovations to increase regional income. Muluk (2006) said that PAD or locally raised revenue is income that is determined and collected locally. Meanwhile, Widjaya (1992) said that PAD is one of the basic capital of local governments in obtaining development funds in meeting regional expenditures and regional businesses in order to minimize dependence on obtaining funds from top-level government (subsidies. Another opinion comes from Halim (2004) which states that PAD is all regional revenue originating from regional original economic sources.The components of PAD are divided into four types, namely: (1) Regional taxes; (2) Regional levies; (3) Separated results of regional wealth management; (4) Other -Other valid PAD

Tax

Tax is a mandatory contribution to the state that is owed by an individual or entity that is coercive in nature based on the law, with no direct compensation and is used for the needs of the state for the greatest prosperity of the people. Tax payments are a manifestation of state obligations and the participation of taxpayers to directly and jointly carry out tax obligations for state financing and national development. In accordance with the philosophy of tax law, paying taxes is not only an obligation, but is the right of every citizen to participate in the form of participation in state financing and national development.

Regional Tax

According to Marihot. P. Siahaan (2005) Regional taxes are mandatory contributions made by regions to individuals or entities without balanced direct compensation, which can be imposed based on applicable laws and regulations that are used to finance regional government administration and regional development. The definition of tax according to Mardiasmo (2009) says that "Taxes are people's contributions to the state treasury based on the law (which can be enforced) without receiving reciprocal services (counter performance) that can be directly shown and which are used to pay general expenses." While the definition of tax according to Abut (2007) states that: "Taxes are contributions to the state, which can be imposed and owed by those who are obliged to pay them according to regulations, without getting performance back, which can be directly appointed, and whose purpose is to finance general expenses.

related to the duty of the state to administer the government.”

Regional Tax is one of the important regional revenues to finance the administration of government and regional development in carrying out services and to the community as well as realizing regional independence. Types of Regional Taxes regulated in Regional Regulation no. 02 of 2015 concerning Regional Taxes, consisting of 1) Hotel Tax 2) Restaurant Tax 3)Entertainment Tax 4) Advertising Tax 5) Street Lighting Tax 6) Parking Tax 7) Groundwater Tax. Regional Taxes, then it is eferred to as Taxes according to Law no. 28 of 2009 Article 1 paragraph 10 concerning Regional Taxes and Regional Levies is a mandatory contribution to the Region that is owed by an individual or entity that is coercive based on the Law, without

4 receiving direct compensation and being used for the purposes of the Region for the greatest prosperity of the people.

Hotel Tax

Regional Regulation No. 2 of 2015 explains the hotel tax imposed on services provided by hotels that provide convenience and comfort. The object of hotel tax imposition is the provider of lodging/resting service facilities including telephone, facsimile, telex, internet, photocopying, washing, ironing, transportation and other similar facilities provided or managed by the hotel for a fee, which includes motels, inns, houses lodging and the like, as well as boarding houses with more than 10 (ten) rooms, apartment spaces that have been converted into hotels or boarding houses, and other similar business activities. The subject of Hotel Tax is an individual or entity that makes payments to an individual or entity operating a hotel which is a Hotel Taxpayer. The hotel tax rate charged to the hotel tax subject is 10% of the payment paid to the individual or entity operating the hotel.

Based on Malang City Regulation No. 16 of 2010 concerning Regional Tax Article 4, Hotel Tax Objects are services provided by hotels with payment, including supporting services as hotel amenities that provide convenience and comfort, including sports and entertainment facilities. Meanwhile, those who are subject to tax are individuals or entities operating hotels.

The Hotel Tax rate for motels, inns, inns and other similar business activities is set at 10% (ten percent), while the Hotel Tax rate for boarding houses with more than 10 (ten) rooms is subject to a 5% (five percent) rate.

Restaurant Tax

According to Law No. 28 of 2009 Article 1 points 22 and 23, the definition of Restaurant Tax is a tax on services provided by restaurants. What is meant by restaurant is a facility that provides food and/or drinks for a fee, which includes restaurants, cafeterias, canteens, stalls, bars, and the like, including catering/catering services. Based on Regional Regulation No. 16 of 2010 concerning Regional Taxes, Article 12 explains the meaning of Restaurant Tax objects as services provided by restaurants, including food and or drinks consumed by buyers, whether consumed at service places or elsewhere. Meanwhile, those who are subject to tax are individuals or entities that operate restaurants. Restaurant Tax Rates, namely if a restaurant with a sales value of more than IDR. 5,000,000.00 (five million rupiah) to IDR. 15,000,000.00 (fifteen million rupiah) per month, the rate is 5% (five percent). If a restaurant with a sales value of more than IDR. 15,000,000.00 (fifteen million rupiah) per month, the rate is 10% (ten percent).

Restaurant tax is a tax on services provided by restaurants. The object of the restaurant tax imposition is the provider of food and/or drinks for which a fee is collected and the sale of food and/or drinks for delivery, which includes restaurants, cafeterias, canteens, stalls, depots, bars, food courts, bakeries, and the like, including services. catering/catering. Regional Regulation No. 16 of 2010 underwent changes that were regulated in Perda no. 02 of 2015 changed the restaurant with the highest sales of IDR. 5,000,000.00 (five million rupiah) per month excluding tax objects. The restaurant tax rate is 10% per month from the sales value.

Optimization Of Regional Tax

Optimization is the best, the highest, the most profitable, make the best, make the highest, process optimization, method, act of optimizing (to be the best, the highest, and so on).

5 Therefore optimization can be interpreted as an action, process, or methodology to make something (as a design, system, or decision) better and perfect, functional, or more effective.

Optimization of tax revenue has a fairly important role for the implementation of the wheels of the Indonesian government (Adziem: 2018). Taxes as a source of regional income are used to finance expenditures made by the government, such as financing government

administration, building and repairing infrastructure, providing education and health facilities, and providing needs that are not provided by the private sector, namely public goods.

Seeing this phenomenon, it can be said that taxes are a supporter of regional development. Tax management policies in each region of course have differences, depending on the policies and circumstances that occur in each region. In Malang City, many hotels and restaurants can be found that can be used as a source of regional income through taxes, and the government should be able to optimize local tax revenues as a source of regional income, but with the COVID-19 pandemic, the Malang City government continues to optimize taxes by relevant new policies, in accordance with the conditions in the field

With the COVID-19 in Malang City, the government must provide convenience in the payment process and taxpayer reporting to fulfill their obligations in paying taxes. Facilities that need to be maximized at this time are online payments and reporting to maximize the potential of local tax revenues. Counseling to taxpayers can also provide awareness to pay taxes. To increase PAD, it is necessary to intensify and expand the subject and object of income. With COVID-19, intensification is an easy activity and can be done immediately on existing regional income. Intensification of the effectiveness and efficiency of local revenue sources or objects will have a significant effect on PAD.

The development of current technology can be one way to optimize local tax revenues that facilitate tax collection for taxpayers. According to DR. Machfud Sidik, MSc. To increase regional income through optimization of intensification, it can be done by expanding the revenue base, strengthening the collection process, increasing supervision, increasing administrative efficiency and reducing collection costs, and increasing revenue capacity through better planning. On the other hand, the extensification of the Malang City Regional Tax Service Agency (BP2D) in 2019 visited taxpayers to increase regional income in the restaurant tax sector. There are many new cafes and restaurants that have not been registered as taxpayers. The Association of Indonesian Cafe and Restaurant Entrepreneurs (Apkrindo) Malang noted that the culinary business in Malang City experienced significant growth.

The exploration of regional financial sources originating from regional taxes is determined by 2 (two) things, namely: the basis for imposition of taxes and tax rates. The Leviathan model says that the imposition of a higher tax rate theoretically does not always result in the maximum total revenue. This condition depends on the response of the taxpayer, the demand and supply of goods subject to higher tax rates. This theory can be used as the main consideration for local governments in an effort to explore financial sources originating from local taxes which are not always oriented to the imposition of higher rates to achieve maximum total revenue.

6 RESEARCH METHOD

This study adopted a descriptive qualitative method. The data generated from this type of research are words, pictures, and human behavior. This study aims to determine the readiness of the government in maximizing PAD in new normal conditions, in terms of the hotel tax sector and restaurant tax which is the largest cash input provider for PAD in Malang City. The data generated are in the form of policies issued by the government to maximize and reduce the burden on taxpayers, behavior towards taxpayers and taxpayer consumers to comply with health procedures that are enforced without burdening both parties, reducing layoffs by reducing working hours, and reducing maximum quotas. but still, make it easier for taxpayers.

This study will reveal and describe the Optimization of Regional Original Income in the Hotel Tax and Restaurant Tax sectors in the New Normal Period in Malang City. The qualitative descriptive model chosen in this study is expected to provide a clear picture and to explore the problems that occur in detail through the collection of various sources of information and data obtained by researchers. Data collection techniques in this study are Observation, Interview, and Documentation.

DISCUSSION

Hotel Tax in Malang City

According to the Large dictionary of the Indonesian language (KBBI), a hotel is a multi- room building that is rented out as a place to stay and eat for people who are traveling. Based on the Ministerial Regulation on Hotel Business Standards, the Indonesian government categorizes hotel businesses into two, namely Star Hotel and Non Star Hotel. Star hotels are hotels that have met the assessment criteria for classifying one-star, two-, three-, four-, and five-star hotel classes. A non-star hotel is a hotel that does not meet the assessment criteria for classifying a hotel class as a one-star hotel

Hotels in Malang City are classified into 5-star hotels, 4-star hotels. 3-star hotels, 2-star hotels, budget hotels, tourism guesthouses, guest houses, and boarding houses. The following is presented regarding the number of hotels in the city of Malang from 2016 to 2020

Table 4.1 Number of Hotels in Malang City

NO HOTEL TAX 2016 2017 2018 2019 2020

1 Five Stars Hotel 1 1 1 1 1

2 Four Stars Hotel 9 9 9 9 9

3 Three Stars Hotel 8 9 10 11 11

4 Two Stars Hotel 5 5 5 6 6

5 Budget Hotel 56 56 55 57 56

6 Tourism Guest House 21 23 24 24 24

7 Guest House 27 46 59 116 123

8 Boarding House 810 923 1.113 1.315 1.326

Total 937 1.072 1.276 1.539 1.556

7 Based on these data, the number of 5-star hotels, 4-star hotels, 3-star hotels, 2-star hotels, budget hotels, and tourism houses did not experience a sharp increase. On the other hand, guest houses and boarding houses have increased significantly from year to year. The number of star hotels tends to remain unchanged from 2019-2020. Meanwhile, for the type of non-star hotel, only budget hotels experienced a decline, while the increase in the number occurred in tourism guesthouses, guest houses, and boarding houses. However, the number of boarding houses and guest houses has not increased as fast as in previous years.

As we know, Malang City is an Education City where many of the best universities are established in this city, such as Brawijaya University, Malang State University, Muhammadiyah Malang University, and many other universities which have thousands of students. The number of universities in the city of Malang makes the boarding house business a very profitable business if it is developed properly. For this reason, the number of boarding houses continues to grow from year to year. In addition, Malang City is also a city close to Batu Tourism City which is a tourist city. Tourism also has an impact on the number of guest house businesses in Malang City

Malang City Hotel Tax Revenue

The development of hospitality in Malang, which is increasing every year, of course, has a considerable economic impact, one of the real results is the increase in hotel tax revenues from year to year. Based on data from the Malang City Regional Revenue Agency, from 2016 to 2019 the realization of hotel tax revenue always exceeds the set budget, but in 2020 the realization of tax revenue is below the set tax revenue budget, this is reflected in the graph 4.1 below.

The decrease in Tax Realization that occurred in 2020 was the impact of the Covid-19 pandemic. The impact of the pandemic, in this case, occurred on the economy of the City of Malang, especially the Hospitality sector which is one of the supporters of the tourism sector.

Based on Malang City Regional Regulation No. 16 of 2010, it is stated that the basic rate of imposition for hotels of the type of motel, inn, lodging houses, and similar business activities is 10%, while boarding houses are 5%. This tariff has been updated in Regional Regulation No. 2 of 2015 where the tax object is an apartment room that changes its function as a hotel or boarding house, subject to tax rates according to the boarding house.

Hotel Tax Revenue of Malang City during the Pandemic

The Covid-19 pandemic has greatly affected the hotel business as can be seen from the budget table for 2020. The budget in 2020 must be "refocused" again to adjust to a decrease in the target of 50% from the initial target. This decrease in tax revenue occurred due to regulations requiring hotels to close given the enactment of Large-Scale Social Restrictions in early April 2020. The ban on hotel operations caused hotel taxes to decrease by IDR 25,424,516,595 in 2020. This number decreased by 50.89 % from 2019 with total tax revenue of IDR 51,775,202,170. It is also known that the new normal is still unable to meet the target that has been "refocused" for the pandemic period. This resulted in the impact of PAD due to a decrease in hotel tax revenue which is one of the largest contributors to Malang City's local tax revenue.

8 Graph 4.1 Budget and Realization of Hotel Taxes in Malang City in 2019-2020 by

Type

Source: BAPENDA Malang City 2021

Based on Graph 4.2 above, we can see that there is a sharp decline in hotel tax revenue realization from all types of hotels. The Malang City Government and the Malang City Regional Revenue Agency continue to try to make policies that help hoteliers to be able to carry out their tax obligations and provide the best alternative for hotels that are not operating at all during this pandemic. The COVID-19 pandemic has caused many hotel businesses to experience a decline in revenue due to the implementation of strict Health Protocols. In the regulations related to this Health Protocol, the quota of rooms that can be rented is reduced where the number of visitors is also limited. Lectures and teaching at schools that were previously conducted face-to-face are now conducted online, so students who migrate and use boarding services must return to their hometowns. The number of students returning to their hometowns has made many boarding businesses experience a decrease in income. The closure of tourist attractions around Malang City also has an impact on hospitality in Malang City.

Many tourists who vacation around Malang City, especially in Batu City, will choose to stay at hotels in Malang City.

Restaurant Tax in Malang City

A restaurant is a facility that provides food and/or drinks for a fee. Types of restaurants that include facilities with fees are restaurants, cafeterias, canteens, stalls, and the like, including catering services. Restaurant tax according to Regional Regulation No. 16 of 2010 is a tax levied on services provided by restaurants. The service referred to is the sale of food and/or beverages consumed by the buyer, whether consumed at the service place or elsewhere. The amount of restaurant tax collected in this case is determined by the sales value of the

restaurant. Restaurants with sales value above IDR 5,000,000.00 (five million rupiah) up to IDR 15,000,000.00 (fifteen million rupiah) per month will be subject to a 5% tax and

ANGGARAN 2019

REALISASI 2019

ANGGARAN 2020

REALISASI 2020 Hotel Bintang Empat 22,000,000,000. 23,735,765,787. 13,217,031,499. 11,595,505,322.

Hotel Bintang Tiga 12,500,000,000. 13,653,016,366. 7,835,300,695.4 5,852,432,257.7 Hotel Bintang Dua 4,200,000,000.0 4,596,076,442.9 4,062,752,963.1 2,197,432,677.6 Hotel Melati 4,605,811,500.0 4,280,776,240.1 4,103,397,477.1 2,656,524,849.4 Wisma Pariwisata 300,000,000.00 346,320,223.00 318,592,643.86 155,570,146.00 Guest House 750,000,000.00 1,445,731,365.3 1,359,812,178.6 852,393,781.16 Rumah Kos 3,144,188,500.0 3,717,515,745.1 3,399,591,141.8 2,114,657,560.6

0.00 5,000,000,000.00 10,000,000,000.00 15,000,000,000.00 20,000,000,000.00 25,000,000,000.00

9 restaurants with sales value above IDR 15,000,000 ,00 (fifteen million rupiah) is taxed at 10% per month. However, this rule has been amended based on Regional Regulation no. 2 of 2015 which states that the Restaurant Tax rate is set at 10% per month of the sales value as long as the sales are above IDR 5,000,000.00 (five million rupiahs) per month

Restaurant Tax Revenue during the pandemic in Malang City

Graph 4.2 Budget and Realization of Restaurant in Malang City 2016 – 2020

Source: BAPENDA Malang City 2021

However, it is still sufficient to meet the restaurant tax revenue target set by the Malang City BAPENDA. It can be seen in the table that restaurant tax revenues can exceed the target that has been set after "refocusing" by BAPENDA Malang City. Total restaurant tax revenue decreased by 28.96% compared to 2019. This was explained again by Mrs. Amalia Mahardani S. Stp. with takeaway services and purchases via online applications. So even though the restaurant can't be fully like before the pandemic period, it can still earn income. Another supporting factor because many people work online or can be called "work from home" which is hereinafter abbreviated as WFH or work at home makes online applications a fulfillment of a consumptive sense

Graph 4.3 Budget and Realization of Restaurant Taxes in Malang City in 2019 – 2020 by type

Source: BAPENDA Malang City 2021 2013 2014 2015 2016 2017 2018 2019 2020 ANGGARAN 21,437, 28,476, 28,476, 34,976, 44,976, 59,200, 72,744, 60,018, REALISASI 25,479, 30,473, 39,071, 47,498, 55,192, 64,680, 84,625, 60,119,

0.00 10,000,000,000.00 20,000,000,000.00 30,000,000,000.00 40,000,000,000.00 50,000,000,000.00 60,000,000,000.00 70,000,000,000.00 80,000,000,000.00 90,000,000,000.00

RESTAURANT TAX

ANGGARAN 2019

REALISASI 2019

ANGGARAN 2020

REALISASI 2020 Restoran 37,150,000,000 43,826,775,744 30,590,365,972 30,503,819,130 Rumah Makan 29,695,000,000 31,559,321,749 23,256,711,332 22,197,597,767 Cafetaria 5,899,000,000. 9,239,191,353. 6,171,760,244. 7,417,664,299.

0.00 10,000,000,000.00 20,000,000,000.00 30,000,000,000.00 40,000,000,000.00 50,000,000,000.00

10 The table shows that in 2020, the restaurant tax from cafeterias exceeds the target set by the Malang City BAPENDA. This can cover the lack of targets that occur in the types of restaurants and restaurants that do not reach the set targets. As we know that currently there are rampant cafe businesses that provide the main menu in the form of coffee which is favored by young people, besides that the current Cafe model is a special attraction for millennials, which is why many people currently prefer cafes compared to other types of businesses. others, moreover the cafes that have sprung up at this time are very comfortable for consumers, as well as excellent facilities.

Regional Original Revenue (PAD) of Malang City

Increasing Regional Original Income (PAD) is one of the keys to success in achieving regional development goals. In achieving these development goals, local governments through Law Number 28 of 2009 concerning Regional Taxes and Levies are given the authority, among others, to determine regional taxes and levies. , the results of the management of separated regional assets, the discretion to set tariffs following their capabilities, and other legal sources.

In its implementation, the government must pay attention to the principles of democracy, equity, and justice involving community participation, and accountability by taking into account regional potential.

Based on records of revenue from Malang City's Original Regional Revenue (PAD) from 2015 to 2020, the PAD acquisition fluctuated, but a fairly large decline occurred in 2020. Data on Malang City's PAD Acquisition can be seen in the following graph

Graph 4.4 Regional Original Revenue of Malang City 2015-2020 Source: BAPENDA, 2021

Based on the graph above, it can be seen that the realization of Regional Original Revenue in 2015 to 2018 experienced a significant increase, but in 2018 it decreased slightly, while in 2019 it increased again. From 2019 an amount of IDR 588,066,042,351.01, but decreased in 2020 to IDR 484,833,704,453.99. This shows a sharp decline compared to

2015 2016 2017 2018 2019 2020

PAD 424,938,7 447,332,6 588,276,9 556,888,3 588,066,0 484,833,7 Pajak Daerah 316,682,8 374,641,6 414,961,5 434,678,3 460,047,4 351,778,7

0.00 100,000,000.00 200,000,000.00 300,000,000.00 400,000,000.00 500,000,000.00 600,000,000.00 700,000,000.00

11 previous years. One of the causes of the decline in Malang City's PAD revenue is the Covid- 19 Pandemic which resulted in a decline in the economy of Malang City.

One of the largest contributors to Regional Original Revenue in Malang City is the Taxation sector. There are nine types of Regional Taxes in Malang City as the following:

1. Hotel Tax 2. Restaurant Tax 3. Entertainment Tax 4. Advertising Tax 5. Street Lighting Tax 6. Parking Tax

7. Underground Water Tax 8. Land Building Tax (PBB)

9. Land and Building Rights Acquisition Fee (BPHTB)

Graph 4.5 Realization of Regional Original Revenue from Regional Taxes Source: BAPENDA, 2021

Based on the table above, it can be seen that the Realization of Regional Original Revenue from Regional Taxes experienced a significant decrease in 2020. Of the nine types of taxes that exist, four types of taxes experienced a fairly high decline, even reaching almost 50%, including Tax Hotel, Restaurant Tax, Entertainment Tax, and Land and Building Rights Acquisition Fee (BPHTB). Taxes that have decreased by almost 50% are taxes that are closely related to the tourism sector, namely Hotel Tax, Restaurant Tax, and Entertainment Tax.

Pandemic conditions like this require local governments to be able to optimize tax revenue in various ways, such as tax intensification and extensification. In addition, during this pandemic period planning, implementation, structuring, reporting, accountability, and supervision of local tax revenues are also needed, therefore a strong commitment from all parties is needed to carry out the stages of the PAD management strategy, starting from the intensification and extensification at the PAD stage. planning, coordination, and consolidation in the implementation and optimization of supervision. Local governments need to be encouraged to

20,000,000,000.000.00 40,000,000,000.00 60,000,000,000.00 80,000,000,000.00 100,000,000,000.00 120,000,000,000.00 140,000,000,000.00 160,000,000,000.00

2019 2020

12 work more effectively and efficiently in managing their regional revenues through improving public services and welfare.

Optimizing Regional Original Revenue (PAD) of Malang City

Optimization of local taxes consists of expanding the local tax base, simplifying the local tax structure, adjusting the number of local tax rates, strengthening local tax administration, strengthening the supervision system, adjusting to relevant laws and regulations, classifying types of local taxes.

One of the optimizations of PAD is through the extensification and intensification of local taxes. Extensification is an activity by the Directorate General of Taxes (DGT) for taxpayers who have met the subjective and objective requirements but have not registered to be given a Taxpayer Identification Number (NPWP) following tax laws. And intensification is an advanced stage, in which the activity optimizes the extraction of tax revenues for tax subjects and objects that have been registered or registered in the DGT administration.

CLOSING Conclusion

The Covid-19 pandemic has caused PAD to experience a significant decline. The decline in PAD in the city of Malang in 2020 is known to reach IDR 484,833,704,453. This amount decreased compared to the previous year where Malang City's PAD was IDR 588,066,042,351 in 2019. Hotel taxes and restaurant taxes are the biggest contributors to PAD in this city. Restaurants and hotels are the two business sectors that have been most affected by the pandemic. The implementation of health protocols and PSBB has limited operational activities for hotels and restaurants. The restaurant in this case only provides a "take away"

service so that the restaurant's income decreases. The central government gave directions to reduce PAD targets for all local governments by 50% from the initial target as an effort amid a pandemic. The local government of Malang City is optimizing to increase Malang City's PAD.

After the refocusing, it was found that the hotel tax in Malang City could not reach the target, where only 74.13% of the initial target could be met, which was IDR 25,424,516,595.

This is different from the Restaurant Tax which can meet the target with a percentage of 100.17% or IDR 60,119,081,197. Mr. Hendi, who is an academic in the field of taxation, however, believes that the government should adjust the target reduction according to the circumstances of each region. Local governments are also better off doing tax relaxation with the exemption of tax penalties or so-called "sunset policy". BAPENDA as the agency that manages regional taxation also makes policies that advise taxpayers of hotels and restaurants that are not operating to apply for tax exemptions.

Tax exemption can be obtained after the requirements in the form of making a statement that the turnover obtained is 0. BAPENDA also has a team to collect data regarding the potential for new taxpayers. This method can increase local tax revenue or PAD. However, this kind of effort is still not optimized because many hotel and restaurant businesses that should be able to become taxpayers have not registered their businesses. These restaurants are usually only registered in online applications, where this application does not collect local taxes so the government cannot collect local taxes for related restaurants.

13 Another thing that has been maximized by BAPENDA is the tapping box program, which has been used long before the pandemic. However, the lack of maintenance or control in the field makes this program less effective. A tapping box is a tool that oversees the recording of transactions in the business system. BAPENDA also provides services for hotel and restaurant taxpayers to report their taxes through the "Whatsapp" number to reduce direct contact considering the ongoing pandemic.

Research Limitations

Hotel tax and restaurant tax are very sensitive topics for informants, especially hotel and restaurant managers. This is because taxation is the privacy of every business that cannot be disseminated. In addition, time constraints made it difficult for researchers to familiarize themselves with informants from hotels and restaurants

Suggestion

It is hoped that further research will dig deeper information through the perspective of hotel and restaurant taxpayers who have experienced the direct impact of the pandemic with a different perspective from this research. The development of this research can be done through an intensive approach to hotel taxpayers and restaurant taxpayers. Thus, more in-depth data can be obtained.

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