This study aims to determine the effect of the flypaper effect on regional financial performance both directly and indirectly through local taxes as an intervening variable. The type of data used for this study is secondary data with a population of 96 data on the realization budget report of the district / city South Sulawesi province during 2014-2017. The Report consist of Revenue Sharing, General Allocation Funds, Regional Revenues and Regional Taxes. This research was tested using path analysis. Research Results Flypaper Effect in General Allocation Funds (DAU) and Flypaper Effect on Revenue Sharing Funds (DBH) have direct influences to local taxes, second Flypaper Effect in General Allocation Funds (DAU) and Flypaper Effect on Revenue Sharing Funds (DBH) have direct and indirect effects on local financial performance through local taxes on South Sulawesi district/city during 2014- 2017.

Keywords : DBH, DAU,PAD,Local Taxes, Regional Financial Performances, Flypaper Effect.