Malaysia’s Inland Revenue Board (IRB) has launched a significant operation, “Ops Token,” to tackle tax evasion in the cryptocurrency sector. The initiative aims to reduce tax revenue leakage from crypto trading activities, urging traders to declare their earnings or face stringent compliance actions.
Operation Details and Government Initiative
According to local media outlet The Malaysian Reserve, 38 personnel from the Royal Malaysia Police and CyberSecurity Malaysia (CSM) conducted raids across 10 locations within Klang Valley. The operation focused on companies suspected of not properly reporting their crypto trading activities to the federal agency. This initiative aligns with the government’s efforts to enhance tax administration and reduce revenue losses.
Evidence of Tax Evasion Uncovered
Authorities allege that several limited liability partnerships and corporate entities were established for the sole purpose of crypto trading, avoiding tax declarations. During the operation, the IRB discovered cryptocurrency trading data stored on mobile devices and computers. This data revealed significant undeclared digital asset transactions, highlighting a substantial leakage of tax revenue.
The IRB plans to analyze the seized data to ascertain the value of the crypto assets traded and the profits generated. This analysis will help determine the extent of the tax leakage that was not properly reported.
IRB Chief’s Warning to Crypto Traders
IRB CEO Datuk Abu Tariq Jamaluddin emphasized that individuals engaged in crypto trading are subject to Malaysia’s income tax rules. He warned traders to promptly declare their crypto earnings to the nearest IRB offices before the agency initiates compliance actions. The IRB expects this operation to boost Malaysia’s tax revenue by improving tax efficiency and reducing leakages, contributing to the sustainability of the country’s revenue collection.
Regulatory Landscape for Cryptocurrency in Malaysia
In Malaysia, cryptocurrency is legal and regulated by the Securities Commission (SC), which oversees the country’s capital markets. Cryptocurrencies are considered securities, making them subject to Malaysia’s securities laws. However, the central bank does not recognize cryptocurrencies as payment instruments or legal tender. Crypto-focused businesses must comply with the country’s income tax laws.
The Ops Token operation underscores Malaysia’s commitment to ensuring tax compliance within the rapidly growing crypto sector, aiming to secure its fiscal stability.
