Local government service delivery is the litmus test of a governmentís responsiveness to itís people in which a local authority is a ëcradle-to-graveí agency, supplying a broad range of services to local communities and disbursing formidable sums of money in the process. Similar to many parts of the world, the property tax is an important source of local government revenues in Malaysia. On the other hand, the impact of taxation influences the availability of financial capital that can be used for day-to-day expenses for the administration and purchase of utilities for property. In other words, it is evident that taxation system and its policy directly or indirectly affect the type, volume and quality of facilities provided within a local authority. This paper therefore, seeks to uncover a number of emerging political, social and economic issues pertaining to the rationality of property taxation as a basis for local authority revenue in an attempt to provide quality services for taxpayers. It aims to provide an insight on prevailing related issues which are increasingly becoming critical and requiring serious as well as immediate attention and solutions to ensure the delivery of best value services and achievement of taxpayerís satisfaction within local authorities in Malaysia.