Local Government (PBT): City, Municipal and District Councils Under Act 171

The tier of government closest to daily life — the one that handles rubbish collection, street lighting, business licences, building-plan approvals and assessment rates — is not the Federal Government or the State Government, but the Local Authority (Pihak Berkuasa Tempatan, PBT). Yet unlike the Dewan Rakyat and the State Legislative Assembly, whose members are chosen through elections, PBT members today are appointed, not elected.

This article explains the structure, legal framework and membership of PBT as set out in the legislative text and official sources, along with the historical background of the shift from elected councils to appointed councils — descriptively and without evaluation.

At a glance

Common name	Local Authority (Pihak Berkuasa Tempatan, PBT) / local government (local authority)
Position	Third tier of administration, below the Federal Government and the State Governments
Principal law (Peninsula)	Local Government Act 1976 (Act 171)
Law (Sabah)	Local Government Ordinance 1961
Law (Sarawak)	Local Authorities Ordinance 1996
Categories	City Council, Municipal Council, District Council
Membership	Yang Dipertua/Datuk Bandar + not fewer than 8, not more than 24 councillors (Section 10 of Act 171)
Appointed by	State Authority (Section 10)
Councillor’s term of office	Not exceeding three years; may be reappointed (Section 10)
Coordinating ministry	Ministry of Housing and Local Government (KPKT) / Department of Local Government (JKT)

The three categories of PBT

According to the official portal of the Department of Local Government (JKT) under KPKT, PBT are divided into three categories according to population and annual revenue criteria:

Category	Population	Annual revenue
City Council (City Council)	More than 500,000 people	More than RM100 million
Municipal Council (Municipal Council)	More than 150,000 people	More than RM20 million
District Council (District Council)	Fewer than 150,000 people	Less than RM20 million

City Councils generally administer major urban areas and state capitals, Municipal Councils administer semi-urban areas, while District Councils are more focused on rural areas. These criteria determine the status of a PBT and may be reviewed as an area develops.

According to the JKT KPKT portal, there are a total of 151 PBT in Malaysia — 19 City Councils, 40 Municipal Councils and 92 District Councils. In addition, several other bodies are empowered by their respective State Governments to carry out PBT functions, among them Perbadanan Putrajaya, Perbadanan Labuan, the Kulim Hi-Tech Local Authority and the Tioman Development Authority. (The exact number changes from time to time and needs to be verified against the latest KPKT statistics.)

Legal framework: one Peninsula, two Borneo

Local government in Malaysia is not governed by a single law, because it involves the Federal-State division of powers:

• Peninsular Malaysia — Local Government Act 1976 (Act 171), which applies to the Peninsula.
• Sabah — Local Government Ordinance 1961.
• Sarawak — Local Authorities Ordinance 1996.

Act 171 gives the State Authority the power to establish, amalgamate or dissolve PBT within their respective States, and to fix the boundaries of their administrative areas. For context on how the powers of local government are placed under State jurisdiction, see the Federal-State division.

Membership: what Section 10 of Act 171 provides

Section 10 of Act 171 sets out the composition of a PBT. A local authority consists of:

1. A Yang Dipertua (President, for Municipal Councils and District Councils) or a Datuk Bandar (Mayor, for City Councils); and
2. Not fewer than eight (8) and not more than twenty-four (24) councillors (Councillors).

All of them are appointed by the State Authority — that is, the State Government through the relevant State Authority. Section 10 also sets out the qualifications for councillors: they must reside within the area of the local authority and, in the opinion of the State Authority, be persons who have wide experience in local government affairs or who have achieved distinction in any profession, commerce or industry, or who are otherwise capable of representing the interests of the community in that area.

The term of office of each councillor does not exceed three years, and a councillor may be reappointed after the expiry of their term.

Note the terminology used: under Section 10, councillors are appointed by the State Authority. Act 171 does not provide for the election of councillors through polls — a distinction that underpins the historical discussion below.

Functions and powers

PBT carry out a range of municipal functions provided for under Act 171 and related laws, including:

• Public services such as solid waste management, cleansing, drainage and street lighting;
• Development planning and control — building-plan approvals, permits and compliance;
• Business licensing and enforcement of by-laws (by-laws);
• Maintenance of public facilities such as parks, markets and halls.

The main revenue source of a PBT is the rate imposed on rateable holdings within its area — often called assessment tax or door tax — alongside licence fees, compounds and grants (grant) from the Federal and State Governments. (The exact provision number in Act 171 governing assessment rates needs to be verified against the text of the Act.)

From elected councils to appointed councils

The appointed-council system of today was not the original state of affairs. Local government in Malaya once had elected members:

• 1952 — The first municipal council election was held in Kuala Lumpur, won by the UMNO-MCA alliance, which secured nine of twelve seats. Local elections spread to several towns throughout the 1950s and early 1960s.
• 1965 — Following the Proclamation of Emergency during the Indonesia-Malaysia Confrontation (which began in late 1964), the local government elections scheduled for 1965 and 1966 were suspended. This suspension remained in force thereafter.
• 1965-1970 — The government established the Royal Commission of Enquiry into the Workings of Local Authorities, chaired by Senator Athi Nahappan, in 1965. Its report, published in 1970, recommended restoring elected representation — including the need for an elected local authority to administer each state capital and elected representation in other PBT.
• 1973 — The Local Government (Temporary Provisions) Act 1973 gave the Federal Government power to review local government law and to manage the administration of PBT on a temporary basis. (The details of this instrument need to be verified against the original legislative text.)
• 1976 — The Local Government Act 1976 (Act 171) was passed. Rather than restoring elected councils as recommended by the Athi Nahappan Commission, Act 171 provided for a system of councillors appointed by the State Authority.

In Sarawak, local government elections were reported to have continued longer than in the Peninsula before eventually ceasing to be held. (The exact year needs to be verified against official records.)

Attempts to revive local elections

The issue of restoring local government elections — sometimes called the “third vote” — resurfaces from time to time:

• 2008 — The Penang and Selangor State Governments expressed a desire to restore PBT elections, but were unable to do so.
• 2021 — The then Minister of Housing and Local Government cited cost as a consideration (estimated at around RM2 million for each council).
• 2024 — The government stated that local government elections were not a priority at the time.

The question of whether local elections can be restored also involves legal questions about Federal versus State powers — an area that remains a subject of public and legal debate.

Common misconceptions

“PBT councillors are elected by residents.” Under Section 10 of Act 171, councillors are appointed by the State Authority. Local government elections have been suspended since 1965 and were not restored.

“One law governs all PBT in Malaysia.” Act 171 applies only to the Peninsula; Sabah is governed by the Local Government Ordinance 1961 and Sarawak by the Local Authorities Ordinance 1996.

“Datuk Bandar and Yang Dipertua are the same.” The term Datuk Bandar (Mayor) is used for City Councils, while Yang Dipertua (President) is used for Municipal Councils and District Councils.

“City, Municipal or District status is determined arbitrarily.” PBT categories are set according to the population and annual revenue criteria outlined by KPKT, and a PBT may be upgraded when it meets those criteria.

“The Athi Nahappan Commission recommended appointed councils.” On the contrary — the Royal Commission chaired by Athi Nahappan (1970 report) recommended restoring elected representation. Act 171 took a different approach by retaining appointed councils.

What’s next

To see where PBT sit within the broader structure of government, start with the three tiers of government and the Federal-State division of powers.

For the State-level legislative body that regulates enactments relating to local government, see the State Legislative Assembly. For the body that conducts federal and state elections — and the context of the discussion on local elections — see the Election Commission.

The full text of the Local Government Act 1976 (Act 171) can be referred to through the official legislation portal, while the definitions, categories and statistics of PBT are published by the Department of Local Government (JKT) under the Ministry of Housing and Local Government (KPKT).