JUST weeks into 2026, early signals from the Inland Revenue Board (IRB) indicate a year defined by tighter digital enforcement such as the rollout of stamp duty self-assessment and the long-awaited improvements in tax refund administration.
The Chartered Tax Institute of Malaysia (CTIM) 2026 Members’ Dialogue Series highlighted IRB’s immediate priorities, offering timely insight into how administrative refinement, data-driven compliance, and enhanced taxpayer engagement are shaping Malaysia’s tax landscape in the months ahead.
Marking its 35th anniversary, CTIM remains committed to fostering constructive engagement between tax professionals and Malaysia’s tax authority.
The opening session outlined four strategic directions set to shape 2026, with particular emphasis on tax refund administration – a matter of significant importance to businesses and individual taxpayers alike due to its direct impact on cash flow.
While subsequent sessions will delve deeper into stamp duty self-assessment and e-invoicing, this inaugural dialogue sets the tone for what appears to be a pivotal year for tax administrative reform.
Strengthening e-invoice implementation
A core priority for IRB in 2026 is the continued full-scale implementation of e‑invoicing.
With more than one billion e‑invoices transmitted last year, the initiative is progressing steadily, with this year positioned as a period of refinement and stabilisation.
To support micro, small, and medium enterprises (MSMEs), particularly those with an annual turnover between RM1mil and RM5mil, IRB has expanded access to free digital tools.
These include the MyInvois portal, a dedicated mobile application, and a new e‑pos solution now available to businesses earning up to RM5mil.
Eligible e‑pos applicants may also receive complimentary receipt printers until June 2026.
These measures aim not only to ease adoption but to also narrow the digital gap between larger corporations and smaller enterprises, strengthening nationwide readiness ahead of full e-invoice integration.
Stamp duty self-assessment and targeted enforcement
Phase 1 of the stamp duty self‑assessment came into effect on Jan 1, 2026, marking a shift toward greater taxpayer accountability.
At the same time, IRB is expanding the use of data analytics, cross-border information exchange, and technology-driven insights to strengthen enforcement capabilities.
Key focus areas include:
> High-net-worth individuals: CRS-AEOI data indicates that 14,858 resident taxpayers collectively hold more than RM10bil in offshore assets, despite gaps in recent filings.
> Aggressive tax planning: Deemed interest structures and domestic-related party arrangements are expected to face increased scrutiny, particularly where they may distort taxable income.
> CP500 compliance for rental income: Persistent mismatches exist between reported rental activity and estimated tax instalments.
> e-invoice data discrepancies: Early analytics reveal cases where business activity recorded in e-invoices does not align with reported income.
Taken together, these priorities signal a broader move towards targeted, data-driven enforcement – one that is focused on inconsistencies rather than broad-brush measures.
Shining a spotlight on tax refund timelines
Amid these various policy and enforcement priorities, a key focus of the first dialogue was improvements in tax refund administration – an issue consistently raised by taxpayers and businesses over the years.
Refunds generally arise from two main situations:
> Overpayments, resulting from conservative tax estimates, timing differences, or instalments paid in excess than required; and
> Audit or investigation cases, where assessments are subsequently reduced following clarification or appeal.
While the latter may involve more detailed verification, IRB emphasised that once matters are resolved, excess tax should be refunded in accordance with the law.
To mitigate excessive refund volumes, taxpayers are reminded of the 11th-month revision mechanism for tax estimates, which allows greater accuracy throughout the year and supports improved cash‑flow planning.
It was also confirmed that the 2% compensation interest paid on delayed refunds is not taxable, providing certainty to affected taxpayers.
Taxpayers with unresolved refund cases predating 2023 are encouraged to proactively reach out, particularly where incomplete documentation, outdated bank details, or technical issues have caused delays in processing.
While IRB is strengthening communication by notifying taxpayers when refunds cannot be processed due to missing or inaccurate information, taxpayers also play an important role in ensuring their records are complete and up to date.
By reviewing their details and engaging with IRB where necessary, both parties can work together to expedite the resolution process.
In parallel with these efforts to encourage closer taxpayer engagement, IRB has continued to strengthen its digital service ecosystem.
A user satisfaction survey conducted jointly by KPMG and CTIM found that most businesses use at least one of IRB’s digital service platforms, including e‑PCB Plus, e‑Ansuran, MITRS, e‑Sekatan Perjalanan, e‑Janji Temu and IRB Live Chat – with more than half rating these services as good or excellent.
While areas for improvement were identified, the survey highlighted increased responsiveness from IRB, reflecting its growing role as a service‑oriented institution committed to administrative efficiency and transparency.
A year of acceleration and engagement
As Malaysia’s tax administration continues its digital transformation, IRB’s priorities for 2026 reflect a careful balance between facilitation and enforcement.
With the dialogue series set to further explore stamp duty, e‑invoicing and enforcement compliance matters, the year ahead is expected to progress toward a more transparent, efficient and confidence‑building tax system.
The renewed focus on timely tax refunds, coupled with IRB’s commitment to resolving pre-2023 outstanding tax refund cases, represents a meaningful step toward a more reliable and effective framework.
How businesses respond in the coming months will not only determine compliance outcomes and operational efficiency but also signal an important juncture for digitalisation and taxpayer engagement.
Soh Lian Seng is head of tax for KPMG in Malaysia. The views expressed here are the writer’s own.
