KL eyes tax hike: DBKL plans gradual increases to tackle deficit and rising costs, says minister

KUALA LUMPUR, Dec 13 — Kuala Lumpur may soon follow Selangor in raising assessment taxes, with changes expected to roll out in phases, starting with industrial properties.

According to The Star, Minister in the Prime Minister’s Department (Federal Territories), Dr Zaliha Mustafa, shared discussions began in early July, citing the need to revisit taxes to manage rising costs and increase revenue.

“We are reviewing all types of taxes, not just assessment taxes but also quit rent, and have been collaborating with the finance departments of various agencies to study the matter comprehensively,” she was quoted as saying.

Zaliha highlighted that Kuala Lumpur City Hall (DBKL) has been operating at a deficit in recent years, making it necessary to find ways to boost revenue.

“We are conducting studies to propose suitable rates that will not burden the rakyat,” she told The Star.

While unable to provide a timeline, Zaliha acknowledged that a tax hike is unavoidable.

The minister indicated that any potential tax hike next year would be implemented gradually, emphasising that DBKL cannot depend entirely on Federal Government funding.

She noted that road repair costs have surpassed RM100 million, far exceeding the RM36 million provided through the Malaysian Road Records Information System (Marris).

She also pointed to rising expenses in areas like waste management and public housing maintenance.

Landfill operators, she said, have requested higher tipping fees due to increased costs, while public housing requires more funding for lift upgrades and other maintenance needs.

“We must consider all aspects before increasing revenue, but the rates will not necessarily be uniform,” she was quoted as saying.

DBKL last announced a review on assessment rate for the first time after 21 years at the end of 2013.

Earlier this week, the Selangor government approved a 25 per cent increase in local council assessment rates effective January 1, 2025.