How government policy drives manufacturing tax revenue: Evidence from Indonesia

This study investigates the direct and indirect effects of the government's role in tax policy and infrastructure support on supply chain smoothness and its implications for increasing tax revenue from the manufacturing sector. A quantitative approach was applied with a random sampling technique, involving 222 respondents from small to medium-sized manufacturing companies in Lampung Province, Indonesia. Data were collected via questionnaires and analyzed using Partial Least Squares Structural Equation Modeling (PLS-SEM). To enrich the findings, Necessary Condition Analysis (NCA) and fuzzy-set Qualitative Comparative Analysis (fsQCA) were also employed to identify critical conditions and configurational pathways leading to increased tax revenue. The results show that infrastructure support and tax policy both have significant direct effects on supply chain performance and tax revenue. Additionally, supply chain smoothness partially mediates the relationship between government roles and tax revenue. These findings highlight the importance of integrated government support and efficient supply chains in boosting fiscal outcomes in the manufacturing sector.