Analysis of Land Value Zones in the Determination of Tax NJOP in Indonesia

Abstract

This study examines the implementation of land value zones (Zona Nilai Tanah - ZNT) in determining the selling value of tax objects (Nilai Jual Objek Pajak - NJOP) for property taxation in Indonesia. NJOP plays a crucial role in tax policy, yet its frequent disparity with actual market values often results in tax injustice and impacts regional tax revenue. Through a quantitative approach combining descriptive and comparative analyses, this research evaluates the relationship between ZNT and NJOP, utilizing primary data from surveys and interviews with stakeholders and secondary data from policy documents. Findings reveal significant challenges in ZNT’s ability to accurately reflect real market values, leading to notable discrepancies across regions. Statistical tests, including ANOVA and independent samples t-test, highlight how variations in NJOP over time and location contribute to inequities in tax burdens. These inconsistencies create both vertical and horizontal injustices, where vertical injustice refers to unequal tax burdens across different economic classes and horizontal injustice occurs when taxpayers with similar property conditions are taxed unequally due to inconsistencies in valuation. The study emphasizes the need to reform NJOP assessment methods through evidence-based approaches, such as geospatial technology, real-time data analysis, and statistical modelling, to enhance valuation accuracy. Periodic ZNT evaluations and integrating property transaction data can improve transparency, increase public trust, and support sustainable economic growth. By adopting innovative, data-driven land valuation methods, policymakers can foster a fairer and more credible tax system that better reflects dynamic market conditions. This research provides valuable insights for modernizing Indonesia’s property taxation framework, ensuring equitable tax distribution, and bolstering confidence in the tax system.