INNOVATING LOCAL TAX GOVERNANCE: A STUDY OF NON-CASH PAYMENT ADOPTION IN MERAUKE REGENCY SOUTH PAPUA PROVINCE

Abstract

This study aims to analyze the adoption of cashless payment systems in the administration of Land and Building Tax (PBB) in Merauke Regency, South Papua Province, and its impact on regional fiscal performance. Employing a mixed-methods approach with a sequential explanatory design, the research began with a quantitative analysis of 150 taxpayers to examine the relationship between cashless payment adoption, tax compliance, administrative efficiency, and transparency, followed by a qualitative analysis through in-depth interviews with 15 key informants. The findings indicate that the adoption of cashless payment systems increases tax compliance (78% compared to 53% with cash payments), accelerates the payment process, and reduces administrative costs by 7.3% for every 10% increase in digital transactions. However, socio-cultural barriers, such as the preference for cash payments (40%) and limited digital infrastructure in remote areas, remain significant challenges. The study highlights the need for inclusive policies, strengthened digital infrastructure, and community-based approaches to effectively drive fiscal transformation in regions with diverse socio-cultural contexts.