The impact of intellectual capital on local authorities performance in property tax reassessment: the mediating role of process innovation

Abstract

Purpose

This study aims to investigate the factors influencing property tax reassessment performance in West Malaysia. It specifically examines intangible aspects, such as intellectual capital and process innovation among valuation officers. The primary concern in this study is the variability in how effectively local authorities carry out property tax reassessment, with a significant number of them not conducting revaluations regularly.

Design/methodology/approach

The data was collected using self-administered and electronic questionnaires using a purposive sampling method. The 154 useable responses were further analysed using partial least squares structural equation modelling in SmartPLS 4.

Findings

The result shows that process innovation mediates the relationship between structural capital and property tax reassessment performance as well as the relationship between relational capital and property tax reassessment performance. This suggests that local authority systems and policies are indirectly related to reassessment practises by introducing new methods of reassessment in the form of administration and technology. The result shows that building good relationships with stakeholders and other institutions encourages staff to develop innovative ideas for their reassessment activities, thus enhance the performance of property tax reassessment.

Practical implications

The study provides insightful information for local authorities managers and stakeholders in crafting a better policy for periodic property tax reassessment. The study suggests the need for new administration and technological innovation in developing effective property tax reassessment strategies through the integration of organisational structure and relationship building.

Originality/value

The study developed a new model for property tax reassessment performance that incorporates intangible assets with the introduction of process innovation as a mediator.