Local Economic Growth: Does Local Original Income Mediate its Relationship with PBB-P2 and BPHTB?

This study aims to scrutinize the interrelation between the Rural and Urban Land and Building Tax, referred to as Pajak Bumi dan Bangunan Perdesaan dan Perkotaan (PBB-P2), and the Land and Building Rights Acquisition Fee, known as Bea Perolehan Hak atas Tanah dan Bangunan (BPHTB), concerning their influence on Local Economic Growth, with Regional Original Income serving as an intervening variable. The study relies on secondary data sources and encompasses a population of 35 regions within Central Java Province from 2019 to 2021. The research employs the saturated sampling method, resulting in the selection of 105 samples. Methodologically, the analysis entails using path analysis and the Sobel test. The findings reveal a positive and statistically significant impact of PBB-P2 and BPHTB on Regional Original Income. Furthermore, PBB-P2 and Regional Original Income exhibit a positive and statistically significant influence on Local Economic Growth, while BPHTB's effect on local economic growth remains inconclusive. Notably, Regional Original Income, acting as an intervening variable, exerts a discernible influence on the impact of both PBB-P2 and BPHTB on Local Economic Growth. This study contributes to the existing body of knowledge by shedding light on the intricate relationships between property taxation, land acquisition fees, regional income, and local economic growth, offering valuable insights for policymakers and stakeholders in regional economic development and fiscal policy planning