Review on Malaysia tax performance: rates and land tax

Abstract

Rates and land tax are the most important tax in contributing to the finance sustainability and function of a government either at the State or Local authority level of Malaysia. The aim of this paper is to review the comparison on revenue performance from property tax in Malaysia between rates and land tax, in order to boom understanding about property tax as a whole, based on the review of literature references to local and foreign publications. The references include annual report of various authorities, the auditor’s report on the financial, article in newspapers and reviews of previous research works as well as related journals. The findings revealed that there are several roles of local and state authority whereas the efficiency of the authorities in performing their role is largely dependent on their ability to effectively collect revenues from all sources available particularly rates and land tax. Since, for most local authorities’ large proportion of their revenue comes from rates, while for state authorities’ large proportion of their revenue comes from land tax, failure to collect rates and land tax efficiently may result in revenue shortages. The inability to collect taxes effectively make more dependent on grants provided by the states and federal authorities.