Local Government in Malaysia: Councils, Powers, and the Missing Third Vote

The council that collects your rubbish, approves the shophouse next door and bills you for assessment tax is the closest layer of government to your front gate — and it is the one layer you have never been allowed to vote for. Malaysia’s third tier of government is delivered by local authorities (Pihak Berkuasa Tempatan, or PBT), which come in three sizes: City Council, Municipal Council and District Council. Two facts explain almost everything about how they behave. First, local government is a state matter under the Constitution, so your council answers to the state government, not to Putrajaya. Second, local elections have been frozen since 1965, so every councillor is appointed by the state — not elected by residents.

Why is local government a state matter, not federal?

The Federal Constitution puts local government on the State List — item 4 of List II in the Ninth Schedule. That entry covers “local administration; municipal corporations; local, town and rural board and other local authorities; local government services, local rates, local government elections,” everywhere except the Federal Territories of Kuala Lumpur, Labuan and Putrajaya. Because the subject sits on the State List, legal authority over councils rests primarily with the states.

To stop thirteen states from pulling in thirteen directions, Article 95A of the Constitution establishes the National Council for Local Government (Majlis Negara bagi Kerajaan Tempatan). Under Article 95A(1) it consists of a Minister as chairman, one representative from each state (appointed by the Ruler or Yang di-Pertua Negeri), and such number of Federal Government representatives as the Federal Government may appoint, capped at ten. Its duty is to formulate, in consultation with the federal and state governments, a national policy “for the promotion, development and control of local government throughout the Federation” — and both the federal and state governments must follow the policy it formulates. At the administrative level, the federal Ministry of Housing and Local Government (KPKT), through its Department of Local Government (Jabatan Kerajaan Tempatan, JKT), studies and proposes amendments to local-government legislation, coordinates administrative and disciplinary policy, issues circulars and guidelines, and processes applications to upgrade a local authority’s status or expand its boundaries.

What are the three types of local authority?

The Local Government Act 1976 (Act 171) — “An Act to revise and consolidate the laws relating to local government,” which received Royal Assent on 18 March 1976 and was gazetted a week later — defines a “local authority” as any City Council, Municipal Council or District Council. In relation to the Federal Territory, the “local authority” is instead the Commissioner of the City of Kuala Lumpur appointed under the Federal Capital Act 1960.

One limit is built into the Act itself: Section 1(1) states that Act 171 “shall apply only to Peninsular Malaysia.” East Malaysia runs local government under its own state laws — Sabah under the Local Government Ordinance 1961 (Sabah No. 11 of 1961) and Sarawak under the Local Authorities Ordinance 1996 (Sarawak Chapter 20) — so the tier names and thresholds below describe the Peninsular system.

The three types are the same kind of institution at different sizes. A local authority is sorted into a tier according to how many people it serves and how much revenue it raises, and it can be upgraded as a district grows into a town and a town into a city.

Type	Malay name	Head of council	Population	Annual revenue
City Council	Dewan / Majlis Bandaraya	Datuk Bandar (Mayor)	over 500,000	at least RM100 million
Municipal Council	Majlis Perbandaran	Yang Dipertua (President)	over 150,000	at least RM20 million
District Council	Majlis Daerah	Yang Dipertua (President)	under 150,000	under RM20 million

Those population and revenue thresholds are set by KPKT’s Department of Local Government. According to the same department’s public FAQ, there are 151 local authorities nationwide, including Kuala Lumpur City Hall — made up of 19 city or city-municipal councils, 40 municipal councils and 92 district councils. Treat that figure as a snapshot: KPKT’s own pages have at times cited a slightly different total, so confirm the current count against the latest official list before quoting a single number.

Who runs your council — and why can’t you vote for them?

Each council is led by a Datuk Bandar (Mayor) if it is a city, or a Yang Dipertua (President) if it is a municipal or district council, supported by appointed councillors and a permanent staff of officers. The critical point is how those councillors get their seats: they are appointed by the state government, not elected.

That was not always the case. Malaysia held local council elections until 1965, when they were suspended by the Emergency (Suspension of Local Government Elections) Regulations 1965, made on 1 March 1965 during the Confrontation (Konfrontasi) with Indonesia. They were never restored. Elected councillors’ terms were subsequently terminated by the Local Government (Temporary Provisions) Act 1973, after which state-appointed boards and councillors took over. The suspension was then locked in by the Local Government Act 1976 itself: Section 15(1) provides that, “notwithstanding anything to the contrary contained in any written law, all provisions relating to local government elections shall cease to have force or effect,” and Section 15(2) provided that every councillor holding office immediately before the Act commenced would forthwith cease to hold office.

This is the origin of Malaysia’s long-running “third vote” debate — the argument, pressed by civil-society groups and policy institutes, that restoring elected local councils would deepen democratic accountability at the level of government residents deal with most. For now, the third vote does not exist, and accountability for a council’s performance runs upward to the state government that appointed it, not outward to the ratepayers it serves.

What does a local council actually do?

Act 171 gives local authorities a broad menu of powers. Under its “further powers” provision (Section 101), a council may erect and maintain buildings; plant, trim or remove trees; and build and manage public parks, gardens, recreation grounds, playing fields, playgrounds, swimming pools, stadia and community centres. The same section lets councils maintain historical buildings and sites and establish public libraries, art galleries, museums, and botanical and zoological gardens — the civic infrastructure most residents take for granted.

A second cluster of powers, in the Act’s part on food, markets, sanitation and nuisances, is about public health. Councils may establish sanitary services, markets and market buildings, public lavatories and abattoirs; license food stalls; abate nuisances; and generally safeguard and promote public health. In everyday terms, this is the legal machinery behind refuse collection, hawker and business licensing, drain and street upkeep, planning approvals and health inspections.

How are councils funded?

The workhorse of council finance is the assessment rate (cukai taksiran) — a charge levied on the value of holdings (property) within the council’s area, and the main own-source revenue for most PBT. The rating machinery sits in Part XV (Rating and Valuation) of Act 171: Section 127 gives a council the power to impose rates; Section 130 provides that a rate is assessed upon either the annual value or the improved value of holdings, as the State Authority determines; and Section 130(2)(a) caps a rate at 35% of the annual value. Rates are payable half-yearly in advance (in January and July) under Section 133. Councils supplement rate income with licence fees and other charges. That is why your council’s two most visible touchpoints with you as a resident are the assessment bill and the licensing counter: together they fund the services above.

The Federal Territories exception

Kuala Lumpur, Putrajaya and Labuan sit outside the State List entry for local government and outside the ordinary Act 171 council structure. In Kuala Lumpur, the “local authority” role is performed by the Commissioner of the City of Kuala Lumpur under the Federal Capital Act 1960 — the statutory basis for Kuala Lumpur City Hall — rather than by an elected or state-appointed council. This is one reason the capital’s governance is discussed separately from the peninsula’s city and municipal councils.

What’s next

To act on this, find your own local authority’s name (it will begin with Dewan Bandaraya, Majlis Bandaraya, Majlis Perbandaran or Majlis Daerah) and look up its assessment-rate schedule, licensing counters and by-laws through KPKT’s Department of Local Government. If you want the exact wording behind any council decision — a licence condition, a nuisance notice, the appointment of councillors — the source text of the Local Government Act 1976 (Act 171) is the primary reference, and the Ninth Schedule of the Federal Constitution is where local government’s place on the State List is fixed.