Topic > An Evaluation of the Property Tax System in Malaysia

1.0 Introduction Rapid population growth and increasing urbanization have triggered an increase in demand for real estate. These developments ultimately result in the responsibility of local authorities to provide facilities to the public. Therefore, the local government needs some sources to provide these facilities. Basically local government revenue comes from taxes, fees and fines. Property taxes are the largest fund and backbone of municipal finance that is used to provide facilities and services. However, not all land and buildings can be taxed. There are some taxable properties that are exempt by law such as non-profit religious, healthcare, educational and/or social activities; wildlife reserves and forests and other protected areas; cemeteries; those relating to the functioning of certain international organizations; and those relating to official foreign diplomatic presence (Lewis, 2003). Property tax is an ad valorim levy on the value of the property that the owner is required to pay. In Malaysia, assessment fees are charged under the provisions of the Local Government Act 1976. This provision authorizes the local authority to levy assessment fees based on the area of ​​jurisdiction. Property tax is based on market value for the state of Johor and annual value for the rest of the states in Malaysia. Most assessments in Malaysia use the conventional system to assess property tax. The valuation or revaluation of the property is still carried out using a manual approach. This manual approach is the main reason for the inefficiency and lack of systematicity of local government property tax administration. Therefore, only a few local authorities in Malaysia carry out assessments using computer, but this assessment is done by man… middle of paper… x. The literature review will also help the researcher to identify the general elements, components, functions and characteristics of CAMA systems. Secondly, a questionnaire with potential ratings will be conducted in the selected local authorities to reveal the problem faced in property tax administration processes. and procedures, the data and information that must be made available in the system, the report format, user interfaces, user and management functions, etc. Finally, quantitative analysis will be used to analyze user responses to evaluate the strength, weakness, opportunity and threat in property tax administration in Malaysia; the efficiency of the CAMA system and whether it has met the administrative requirements. Proposals to further improve the CAMA system will be outlined for further research in the future.