A reformation model of compliance to improve the property tax revenue generation in Malaysian local governments

This study is aimed at proposing an extension on Fisher’s model of compliance behavior based on empirical findings on property tax revenue generated in Malaysian local government. Adequate delivery of facilities and services alongside community engagement can significantly influence property tax revenue generation. The methodology adopted is a quantitative approach. Questionnaires are administered to about 300 respondents (taxpayers). The findings reveal that poor provision of facilities and services combined with lack of community engagement in local government delivery process results in poor property tax revenue generation. The negative effect is as a result of non compliance in property tax which increases proportionally with inadequate provisions of facilities and services within the local government set-up. This established the fact that in order to improve compliance behavior there is absolute need for adequate delivery of facilities and services alongside community engagement. This requires the need for an extension of the existing Fisher’s Model of compliance behavior which is applicable within the context of the case study area. Therefore, an extension of Fisher’s Model of compliance proposed is based on these requirements. The proposed model can assist the local governments in dealing with issues associated with noncompliance. Sufficient provision of facilities and services in conjunction with community engagement will motivate the taxpayers to settle their tax obligations. This will certainly encourage community development and improve property tax revenue generated. This study introduces a new property tax compliance model which emphasized on a new approach to property tax by interfacing provision of facilities and services with community engagement within the framework of Fisher’s Model