Malaysia’s Inland Revenue Board (IRB) has executed a special operation named “Ops Token” in order to combat tax revenue losses stemming from cryptocurrency trading. According to reports from The Malaysian Reserve, a total of 38 personnel from the Royal Malaysia Police and CyberSecurity Malaysia (CSM) conducted raids on 10 different locations in the Klang Valley region.
The focus of the operation was on companies that failed to accurately report their cryptocurrency trading activities to the federal agency. This initiative is in line with the government’s efforts to minimize tax revenue losses and enhance the country’s tax administration system.
Authorities have alleged that numerous limited liability partnerships and corporate entities were established specifically for cryptocurrency trading, with the intention of evading tax obligations. The IRB has stated that the data collected during the operation will be carefully analyzed to determine the value of crypto assets traded and the profits generated. This analysis will assist the agency in identifying the extent of tax revenue leakage that went unreported to the IRB.
The CEO of the IRB, Datuk Abu Tariq Jamaluddin, has issued a warning to cryptocurrency traders in Malaysia, emphasizing that they are obligated to adhere to the country’s income tax regulations. He urged traders to promptly declare their cryptocurrency taxes at nearby IRB offices to avoid potential compliance measures.
The IRB anticipates that this operation will lead to an increase in Malaysia’s tax revenue by enhancing tax efficiency and reducing revenue losses. The agency is confident that this initiative will contribute to the sustainability of the country’s revenue collection efforts.
In Malaysia, cryptocurrency is legal and regulated by the Securities Commission, the statutory body responsible for overseeing capital markets in the country. Cryptocurrency tokens are considered securities, making them subject to the nation’s securities laws. The central bank of Malaysia does not recognize crypto or tokens as legal tender or payment instruments, and businesses focused on cryptocurrencies must comply with the country’s income tax regulations.
On a related note, Microsoft has announced a $2.2 billion investment in Malaysia for cloud and AI expansion. Additionally, recent regulations in Malaysia surrounding cryptocurrency trading have been a topic of interest, with debates arising on what truly classifies as “Bitcoin Layer 2s.”