When the Residual Is the Largest Item: Own-Source Revenue Composition Across 507 Jurisdictions

Abstract

Own-source revenue is reported as a single line in Indonesian local government accounts and analysed as though its contents were known. They are not. Using realised revenue returns for Indonesian district-level governments in the fiscal years 2017 and 2024, this article decomposes that line into its four prescribed components: local taxes, user charges, the return on separated assets, and a residual category of other lawful own-source revenue. In 2017 the residual was the largest component in the typical jurisdiction, averaging 64.24 per cent of own-source revenue against 27.48 per cent for local taxes, and exceeding half of the total in 366 of the 481 jurisdictions reporting. By 2024 the residual had fallen to 39.66 per cent, still the largest single component, while user charges rose from 8.28 to 23.99 per cent over the same interval. Measured on national totals rather than jurisdiction averages, the residual fell from 49.96 to 21.31 per cent. The article argues that a movement of this size across seven years is more consistent with reclassification under a new fiscal statute than with behavioural change on the part of local governments, that the dispersion of the residual across jurisdictions rose sharply as its level fell, and that any indicator constructed on own-source revenue inherits whatever the residual happens to contain.