A specialized operation named “Ops Token” was carried out by Malaysia’s Inland Revenue Board (IRB) to combat tax revenue leakage from cryptocurrency trading. According to reports from local media outlet The Malaysian Reserve, a team of 38 individuals from the Royal Malaysia Police and CyberSecurity Malaysia (CSM) conducted raids at 10 different locations across the Klang Valley.
The objective of the operation was to target companies that were not accurately reporting their cryptocurrency trading activities to the federal agency. This initiative is in line with the government’s efforts to reduce tax revenue leakage and enhance the country’s tax administration.
During the operation, authorities uncovered evidence of tax evasion by various limited liability partnerships and corporate entities involved in cryptocurrency trading. The IRB suspects that these entities were evading tax declarations. According to the IRB, data collected during the operation will be analyzed to assess the value of cryptocurrency assets traded and profits made, aiding in the identification of undeclared tax leakage.
CEO of the IRB, Datuk Abu Tariq Jamaluddin, warned individuals engaged in cryptocurrency trading in Malaysia to adhere to the country’s income tax regulations. He urged traders to declare their crypto taxes at nearby IRB offices promptly to avoid compliance actions.
The IRB anticipates that the operation will enhance Malaysia’s tax revenue by boosting tax efficiency and decreasing leakages, ultimately contributing to the sustainability of the country’s revenue collection efforts.
In Malaysia, cryptocurrency is considered legal and regulated by the Securities Commission, which oversees capital markets in the country. Tokens are classified as securities, making them subject to securities laws. The country’s central bank does not recognize crypto or tokens as payment instruments or legal tender. Crypto-focused businesses are also bound by the country’s income tax regulations.
In a related development, Microsoft has invested $2.2 billion in Malaysia for cloud and AI expansion. Additionally, an article in a magazine discusses why “Bitcoin Layer 2s” may not truly be Layer 2s and the significance of this distinction.