Spread it over 12 months
30/01/2007 NST

BY GURSHARAN SINGH, Kuala Lumpur

BUILDING owners are required to pay assessment rates based on the prescribed percentage of the annual value of the building. This may be reviewed and revised periodically by the local authorities.

These rates form the bulk of the total revenue of the local authorities. Failure to settle the rates by the deadline may result in the imposition of fines and compound fees.

Continued non-payment can result in the moveable property in the building being possessed and auctioned, and also legal action to recover the rates.

These rates are to be collected half-yearly, and must be paid by the end of February and August each year.

Thus, it is important that the collection of this revenue be done in a cost-effective manner. It is common practice to delay payment of the rates until the last day.

Consequently, there are massive jams and long queues at the collection points. These can be seen every six months.

The local authorities are usually blamed for not providing sufficient collection points to cater for the large number of rate-payers.

Building owners are normally reluctant to settle the rates at approved banks or through other means, especially when they have enquiries or complaints.

Having extra manpower and other facilities to cater for just two months in a year is not an economic solution as they will remain unused for the remaining 10 months.

This problem is experienced twice a year throughout the country.

I recently experienced this at Kuala Lumpur City Hall when I went there to settle assessment rates for the first half of this year.

The same problem is experienced at land offices which collect quit rent. This needs to be paid by the end of May/June each year.

The problem can be solved by the local authorities and land offices, with the approval of the Ministry of Housing and Local Government and state governments, by amending laws and procedures to spread the payment over 12 months.

This is cost-effective and efficient.

Another major benefit would be good cash management, where cash flow would be consistent on a monthly basis, instead of insufficient cash during long periods and substantial cash during short periods.

It would also benefit building and land owners who can better manage their cash outflow.

The planning units and financial authorities should study the suggestion for implementation as this will enable them to monitor the financial status of local authorities and state authorities properly.

GURSHARAN SINGH, Kuala Lumpur