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  • Essay / An Assessment of the Property Tax System in Malaysia

    1.0 IntroductionRapid population growth and increasing urbanization have triggered an increase in demand for real estate. These developments ultimately result in the responsibility of local authorities in providing facilities to the public. Therefore, local authorities require certain sources to provide these facilities. The revenues of local authorities come mainly from taxes and fines. Property taxes are the largest fund and backbone of municipal finances, used to provide amenities and services. However, not all plots of land and buildings can be taxed. Certain taxable assets are exempt by law, such as non-profit religious, health, education and/or social activities; wildlife reserves, forests and other protected areas; cemeteries; those linked to the functioning of certain international organizations; and those linked to the official foreign diplomatic presence (Lewis, 2003). Property tax is an ad valorem levy on the value of the property that the owner is required to pay. In Malaysia, tax rates are charged in accordance with the provisions of the Local Government Act 1976. This provision empowers local authorities to levy tax rates based on area of ​​jurisdiction. Property tax is based on market value for the state of Johor and on annual value for the rest of the states in Malaysia. Most assessments in Malaysia use a conventional system to assess property tax. The valuation or revaluation of the property is always carried out using a manual approach. This manual approach is the main reason for the inefficiency and unsystematic nature of local government property tax administration. Therefore, only a few local authorities in Malaysia carry out assessment using a computer, but this assessment is carried out by a man...... middle of paper ......x. The literature review will also help the researcher identify the general elements, components, functions and characteristics of CAMA systems. Secondly, a questionnaire survey with the prospective assessments will be carried out among the selected local authorities to reveal the problem encountered in the property tax administration processes. and procedures, the data and information to be made available in the system, the reporting format, user interfaces, usage and management functions, etc. Finally, quantitative analysis will be used to analyze user responses to assess the strength, weakness, opportunity and threat in property tax administration in Malaysia; the effectiveness of the CAMA system and whether it met their administrative requirements. Proposals to further improve the CAMA system will be presented for further research in the future..