LHDN Urged To Improve Communication And Strengthen Public Trust In Tax System

Samuel Chua

9th January 2026 - 4 min read

The Inland Revenue Board (LHDN) has been urged to place stronger emphasis on public communication and fairness in the tax system, as taxation remains a sensitive and highly personal issue for Malaysians. Deputy Minister of Finance Liew Chin Tong said understanding public sentiment is critical to maintaining confidence in how taxes are collected and administered.

He made these remarks following his first official visit to the LHDN headquarters, where discussions focused on taxpayer engagement, business competitiveness, and the agency’s role in national digitalisation efforts.

Clear And Accessible Tax Communication Matters

Liew said LHDN must ensure that information related to tax rules, policy changes, and legislative amendments is communicated clearly and in language that taxpayers can easily understand. This is especially important when new measures are introduced, as unclear explanations can lead to confusion, compliance issues, and unnecessary anxiety among individuals and businesses.

He noted that effective communication helps taxpayers better understand their obligations and rights, which in turn supports smoother policy implementation. When taxpayers feel informed rather than surprised, acceptance of new rules tends to be higher.

Building Confidence Through Fair And Predictable Tax Administration

According to Liew, public confidence in the tax system depends not only on enforcement, but also on perceptions of fairness and consistency. LHDN plays a central role in shaping how taxpayers experience the system, from filing returns to responding to audits or policy updates.

Clear guidelines, consistent treatment, and transparent processes help reinforce trust, particularly for salaried individuals and small business owners who rely on predictable rules to manage their finances.

Ensuring A Level Playing Field For Malaysian Companies

Liew also highlighted LHDN’s role in supporting Malaysian businesses by ensuring fair tax treatment between foreign and local companies. He said a balanced tax framework is important to prevent domestic firms from being disadvantaged, particularly as Malaysia seeks to strengthen its own corporate champions.

Drawing from his experience at the Ministry of Investment, Trade and Industry, Liew said there is often an assumption that advanced technology and innovation are dominated by foreign companies. In reality, many Malaysian firms have developed strong technological capabilities and are global leaders in specialised industries.

Tax Policy As A Tool To Support National Competitiveness

Liew said tax policy should support the broader goal of developing national companies that can compete internationally. This includes ensuring that local firms are not sidelined due to structural or administrative disadvantages within the tax system.

A fair and well administered tax environment, he said, allows Malaysian companies to focus on growth, innovation, and expansion, rather than navigating unnecessary compliance hurdles.

LHDN’s Expanding Role In Government Digitalisation

On digitalisation, Liew said LHDN has demonstrated its ability to manage large scale, data driven programmes involving a wide segment of the population. He cited the successful administration of Sumbangan Tunai Rahmah, which LHDN managed while continuing its core function as the government’s revenue collection agency.

He also pointed to the targeted fuel subsidy programme Budi Madani RON95 as evidence of Malaysia’s progress in digital governance, noting that such initiatives require accurate data management, system integration, and operational reliability.

Strengthening Digital Systems For Public Service Delivery

Liew said these digital capabilities should be expanded further to improve the efficiency and effectiveness of government processes. Given LHDN’s extensive database and direct interaction with millions of taxpayers, the agency plays a key role in the success of Malaysia’s broader digitalisation agenda.

He added that strengthening digital systems not only improves service delivery, but also supports more targeted policy implementation, which can reduce leakages and ensure assistance reaches the intended groups.

Samuel Chua

Samuel writes about personal finance and financial news, focusing on how banking updates, policies, and promotions affect everyday money decisions. He enjoys making complicated financial topics easier to follow. Outside of writing, he spends his time watching TV shows and occasionally convincing himself he will only watch one episode.

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