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The strategic location and position of Tarakan have made it as one of the Industrial Central in northern part of East Kalimantan Province. That result has led the Government of Indonesia raise the status of Tarakan to become The Administrative City, based on the Government Act number 47 year 1981.
 
In 1997, the status of The Administrative City then upgraded to Kotamadya (big city), which is based on the Indonesian Law number 29 year 1997, that the inauguration was directly carried out by Minister of Interior State, on December 15, 1997; where the day is also declared as the anniversary day of Tarakan City.