Optimizing Regional Tax Revenue Through the Regional Innovation System Approach in Simalungun Regency

Abstract

Increasing regional tax revenue is a key factor in strengthening the fiscal capacity of local governments to support sustainable development. Simalungun Regency, as a strategic region in North Sumatra, faces persistent challenges in optimizing its local tax potential, including low fiscal literacy, fragmented data systems, and limited innovation in tax administration. This study analyzes the optimization of tax revenue through the Regional Innovation System (RIS) approach, which integrates development actors: government, businesses, academia, and communities into a collaborative and adaptive framework. Employing a qualitative descriptive method supported by secondary quantitative data, this research draws on in-depth interviews, field observations, and regional fiscal documents. The findings show that RIS-based strategies, such as cross-sectoral data integration, inclusive digital tax services, and the establishment of a fiscal innovation forum, can significantly enhance local tax performance. This study contributes to both theoretical insights on adaptive fiscal governance and practical recommendations for implementing innovation-based regional tax reforms.