UNIVERSITI TEKNOLOGI MARA

KOTA KINABALU, SABAH

ACKNOWLEDGEMENT
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First and foremost, I would like to thank to Sir Haidi as our lecturer for subject
PAD320 which is Local Government Administration for the valuable guidance and
advice for this course. Through this course, we are able to learn about the function of
local government in managing the activities of the state where the local government are
infra- sovereign which is the geographic sub-division of a sovereign nation or state
exercising the power of jurisdiction in a particular area. Apart from that, I also not forget
to thank to my classmates AM110 5 A1 who helps me to figure out what the topic that
we got and find the resources that related to the assignment that given by our lecturer to
finish it with more successfully.

TABLE OF CONTENT

TITLE
1.0 QUESTION 7 (A)
2.0 QUESTION 7 (B)

PAGE
3
4-5

1.0 QUESTION 7 (a)

State five main sources of local government revenue.

There are five main source of local government revenue that is includes:
1.
2.
3.
4.
5.

Assessment rates
Licences
Rentals
Government grants (inclusive of road grants)
Car parking charges, planning fees, compounds, fines, and interests.

2.0 QUESTION 7 (b)

Describe five challenges faced by local councils in collecting assessment tax.

There are five challenges faced by local councils in collecting assessment tax.
This includes firstly, is there are some individuals who refuse to pay their income tax
and sometimes, the tax payers try to reduce the amount of tax or avoid paying it totally
through manipulation of income declaration and amount spent. This situation same
goes to companies and industries that are also not willing to pay their corporate tax.
This will create problems and challenges to the responsible agencies to update all
information regarding to taxes collected such as personal income tax, corporate tax,
service tax, and others.
Second challenge faced by local councils is there are certain times that the tax
payers are not satisfied with the tax rates imposed to them. The tax payers beliefs that
the tax rates are inappropriate due to the inequality of income given from the
government. This is due to the objectives of taxation system. This can be seen where
taxation become a powerful tool to reduce inequalities of income due to the principle
that rich people will pay more taxes and that is able to narrow down or reduce the gaps
between the rich to the poor. This is through the direct and indirect taxes paid by the
citizens, to the government and further it will be distributed for the poor and needy
citizens. In this situation, the people that have high income think that this
implementation is not fair due to the inequality income given from the government. So
this will affect the collecting process by local councils. This perspective and behaviour
shows by the citizen that not willing to pay due to unsatisfaction will be the challenges to
the local councils to make collecting assessment tax.
Beside that, the other challenge also is because of bureaucracy and red tape
problems within the agency. This is because, even though there are e-filling and epayment, nevertheless there are still problems in implementation and monitoring these
services. Apart from that, many citizens that are living in the rural areas which are far
away from the town also have many problems in using this service. One of the problem
is there are lack in terms of facilities such as internet facilities, so they cannot to apply
this services even the government implement this services to make fastest in collecting
the taxes so that it will save time and cost for the citizens. But they prefer to go to the
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town to pay the assessment tax which is will give many other reason such as not has
enough time to manage the tax, they are far away which is not have transport for the
low income level and so on. So, all of this will affect the local councils to make the
process of collecting tax.
Furthermore, the challenges also regarding to the delayed in paying the tax by
the taxpayers will lead to problems in updating data and information of all tax collection.
For instances, the government was provide the individual income statement. The
purpose is to inform and remind the citizens regarding their obligations to pay the tax.
Other than that, the relevant agencies may impose rules and regulations to fine and
penalty to the citizens who refuses and avoid in paying the assessment tax but there
are still have many citizens that do not pay attention to this statement.
Lastly is, the local councils also has faces the challenge that are related to the
corruption issues in relevant government agencies that could lead to poor performance
and bad reputation. This is due to the personal interest that is not responsible to provide
information and create awareness among the citizens about their obligations to pay the
tax. This problem also will affect the process of collecting the assessment tax where the
taxpayers not able to know when they are should pay their tax. Other than that, the
relevant agencies that are responsible directly or indirectly will be given more training
and exposure in order to improve skills and capabilities in performing their duties rather
than make some bad behaviour such as make a corruption between the other financial
institutions.