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Muhammad Rafly Faeruz Zaman, S.H.
Journal of Law, Public Policy and Public Finance (2025)
Decentralised systems assign regulatory functions to different tiers of government, and the assignment determines which authority holds information about an activity and which holds jurisdiction over it. This study examines a case where the two came apart: in Indonesia, licensing authority for non-metallic minerals and rocks rests with the province, while the tax on extraction is a district levy. The method is doctrinal legal analysis of the licensing, taxation and spatial planning framework, combined with a structured review of governance research published between 2017 and 2024, organised through an analytical triad of function, information and incentive. The central finding is documented in a published Indonesian case study: a district revenue authority levies the mineral tax on businesses that hold no licence whatever, and this is lawful precisely because licensing has ceased to be a district function. Three consequences follow. Tax payment operates as de facto recognition of an unlawful operation; no duty compels the taxing authority to notify the licensing authority of what it observes; and enforcement falls to a tier that does not visit the sites. Comparative evidence from Ghana and from the Salween border shows the same pathology under different constitutional forms, indicating a structural defect. The study argues that the provincial surcharge introduced in 2022 is read as an institutional bridge, and four amendments are proposed — a notification duty, a licence-status field in tax registration, joint inspection authority and a single site register — that a fiscal instrument cannot supply.