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Abstract

This study employs dynamic two-way fixed effect (TWFE) event regressions to analyze the direct impact of SEZ policies, specifically focusing on tourism SEZs in 6 districts across Indonesia and neighbouring districts within the same province. By examining data from 2010 to 2022, the research aims to evaluate how tourism SEZ development influences local tax revenue. Our estimation results show no evidence that Tourism SEZs affect aggregate local tax revenues. However, by type of local taxes, we found that Tourism SEZs have increased hotel tax and entertainment tax but not restaurant tax revenues.

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