Fiscal Inequality in Local Governance: An Examination of Causes and Remedies for Achieving Equity

Abstract

This article aims to explore the main causes of local fiscal inequality and propose solutions to local fiscal inequality, focusing on two main factors affecting inequality: 1) Revenue allocation of local administrative organizations, including budget allocation, spatial inequality, and tourism; 2) Power structures that lack the power to collect taxes, such as land and building taxes, as well as limitations in revenue collection and fiscal management of local administrative organizations that cannot comprehensively manage public missions or services. In addition, the article proposes solutions to local fiscal inequality in each dimension to be consistent with the root causes of the problem, with a focus on public participation and the importance of decentralization, which aims to create equality, reduce gaps between areas, and drive sustainable development in all regions of the country. Understanding this issue will not only help reduce fiscal inequality, but is also an important step towards creating an efficient and fair administrative system, which is the heart of long-term social and economic development.