Local governments gain control over revenue sources derived from their own jurisdictions as

well as from other higher authorities in the form of autonomy. Local governments have the
authority to collect, store, and then spend the money they have collected in order to provide
the maximum possible benefit to the taxpayers, who are the citizens of the area. Although the
budget must be approved by state officials, as stipulated in the legislation, the budget is
subject to approval by the legislature. Thus, in order to gain revenue local government has
two sources of revenue which are Land Base Revenue and Non-Land Base Revenue.

First and foremost, for this first source of revenue for local government is Land Base
Revenue. Land Base Revenue is known as property or assessment tax. Tax rates can be
different of local government units as long as they are not ultra vires the law. In this aspect,
each area and each local government is different. In this case, it depends also on the place. If
it is in an urban and strategic area then the rates are a little expensive compared to the rural
areas. This tax is levied on properties that are located under the authority of a local
government. Taxes are considered to be the most important source of revenue for the
majority of local governments. They are also levied directly against property owners or
owners of land or buildings. This tax is typically collected on buildings that are owned by the
government or by private individuals. When there are a large number of factory buildings,
plants, offices, and corporate or government facilities, the accumulation hail is likely to be
significant. It is also dependent on the development of the local authority's jurisdictional
territory. For example, The Klang Municipal Council (MPK) managed to collect revenue as
much as RM123.8 million in April 2020. From that, the Klang Municipal Council received
assessment tax collection as much RM84.15 million. Thus, the collection of assessment tax is
very important for local government. This is because it shows that when the collection
amount is low, local authorities do not have enough funds to cover the cost of administration
and services in their areas of responsibility. As a result, management and service levels will
be disrupted. The is true when costs increase due to inflation and the impact of the COVID-
19 pandemic that hit the country.

Moreover, the second sources of revenue for local government are Non-Land Based. This is
the government's recurrent income from sources other than taxes. It is, on the other hand,
charged against local government services. For example, of Non-Land Based are Fees and
charge and License. Local authorities also get revenue from the provision of services to the
public in an area. Local governments are clearly empowered to collect fees and service
charges. Fees are usually collected and charged to health clinics, animal clinics, halls,
swimming pools, football fields, libraries and for service fees are charged for the use of
garbage transport services, parking lots, market cleaning fees and so on. However, the fees
and service charges charged can only cover part of the cost of providing the facility.
Therefore, the source of resources from these types of service fees and fees can help a little to
revenue of the local government. Another type of non-land based is license. In the context of
local government, a license refers to payments received by a local government from various
patterns of business and activities associated with it. The local government act gives power to
local governments in matters of registration, licensing and even small businesses. Local
governments issue various licenses such as licenses to markets, grocery stores, caretakers,
entertainment venues, eateries, night markets and so on. For example, with the pandemic
situation that hit the country, the Klang Municipal Council (MPK) issued 500 temporary
licenses in stages to help unlicensed small business continue their operations However,
revenue from licenses usually do not provide a significant financial impact to local
governments except to local governments in urban areas or areas that are undergoing a rapid
urbanization process. This is because the spending power in the city and rural is different.

In conclusion, local government is very important to ensure the local community is

maintained in terms of environment, health, security, revenue and so on. From this, the local
governments provide opportunities for the people or local residents to participate in the
management of the area where they live. In this way it can strengthen the relationship of
cooperation between the government and the people.