Unexpected Expenditures Definition of Local Government Expenditures BD

25 a. Central government transfers are usually accompanied by certain conditions, so it is a compromise relative autonomy, especially if the funds transfer is the dominant source of local revenues. b. Rely on the central government transfer actually reduces the local creativity to take a policy associated with an efficient local revenue collection. Original Local Government Revenues PAD ideally should be the main source of local revenue. Another source of income is relatively volatile and tend to out of control authority local government Sidik, 2002; Bappenas 2003. The data indicate that the contribution of PAD increased from 6.59 in 2001 to 7.33 in 2002 Central Bureau of Statistics, 2004, the main source of revenue from local taxes and retribution. However, the contribution of PAD is still very small while compared to the transfer from central government DAU and DAK, which reached 79.14. The Original Local Government Revenues are accumulated from the Tax Revenues containing Local Tax and Local Retribution, Non Tax Revenues, which contain the profit of Regional Owned Enterprise BUMD, Postal Receipts Investment and Management of Natural Resources. Bastian, 2002. The Regional Original Revenues PAD are all local revenues derived from the original local economy. The identification of revenue source is : investigate, determine and establish where the real source of 26 revenues by way of researching and seeking and managing revenue sources properly so as to provide maximum results. Elita in Pratiwi, 2007. In the Law, no.13 from 2006 the Ministry of Home Affairs explains the revenues will be divided according to the type of income:

a. Local Taxes

According to Law no.28 2009, the local taxes are a mandatory contribution to the region charged to individuals or entities, which is not getting benefits directly. The purpose of the local taxes is seen in a better citizen’s prosperity. Mardiasmo et al, 2002 revealed that in order to reduce the dependence on finance from the central government, local governments should be given autonomy and flexibility in this area. An important step that must be done to increase local tax revenues is to calculate the potential tax revenues that the real area owned by the area, so they can know region’s capacities tax capacities. The improvement of tax capacities is essential in order to optimize the local revenue sources. Law No. 34 of 2000 on the amendment of Law no. 18 Year 1997 on local Taxes broken down into: 1 Province taxes consist of: Motor vehicle tax and water vehicle, transfer tax motor vehicles BBNKB and vehicles on the water,