1.0 INTRODUCTION Land Tax is the tax payable by the owner of land to the State Authority through the Land Office. In Islamic economics, land tax is called kharaj. According to Johari and Ibrahim (2010), “kharaj means revenue, tax, rent, tariff, lease, produce, income, wages, etc. received from the land which Muslim jurists call kharaj land.” Al-kharaj is an Arabic word derived from Greek and used in Rome, Ancient Greek and Byzantine meaning tax. Kharaj refers to land tax in the history of Islam. Imam Abu Obaid said that the agricultural tax received by non-Muslim owners of lands is also kharaj. In Malaysia, land tax must be paid in full from 1 January each year and will be in arrears on 1 June each year. Land tax must be paid once a year to the State Authority. The annual tax rate calculated based on land area (in square meters), real terms, categories and classes of land. Property tax payments can be made online and manually. Paying land tax via online will receive a 5% discount. The online tax collection rate in Malacca increased and vice versa for manual tax collection rate from April to August 2013. In April, the online assessment tax collection rate is 0.27% and continued to rise up to 1, 19% in August while the percentage of manual collection of land taxes in April was further reduced to 99.73% and in August to 98.81% (Pejabat Tanah dan Galian Negeri Melaka, n.d.).Kharaj imposed by early Muslims on authorities of the Koran. Hence this tax was called Al-kharaj and fixed per unit of land in the form of cash or share of the harvest in kind. A survey was carried out on these lands and kharaj was imposed according to the rates fixed per unit of land on different categories of crops. For HR & Widiastuti, ...... half of the document ...... (pp. 18-28).Johari F. (2010). The dynamism in the implementation of Al-Kharaj during Islamic rule (634-785 AD). Jurnal Syariah, Jil. 18, balance. 3 (2010) 629-658.Laman Web Rasmi Pejabat Tanah and Galian Negeri Melaka- Kalkulator Kadar Cukai Tanah Setahun. Retrieved October 4, 2013, from http://ptg.melaka.gov.my/main/kadarcukaitanah.phpLaman Web Rasmi Pihak Berkuasa Tempatan Taman Perindustrian Hi-Tech Kulim. Retrieved October 4, 2013, from http://www.pbttphtk.gov.my/faq_2Nezhad MZ (n.d.). Tribute (Kharaj) as a tax on land in Islam. International Journal of Islamic Financial Services, Vol.5, No.1.Orhanlu, C. (1990). Kharaj in Ottoman Türkiye in the Encyclopedia of Islam. Leiden – New York, EJ Brill, new edition, vol. IV, pp.1053-1055.Salasal SMM (1998). The concept of land ownership: Islamic perspective. Buletin Geoinformasi, Jilid 2, (p 285-304).