LHDN Deploys 2,195 Officers To Audit 1,300 High-Risk Tax Cases

Eloise Lau

5th May 2026 - 3 min read

The Inland Revenue Board (LHDN) has launched a five-day nationwide enforcement operation targeting 1,300 cases flagged as high-risk for tax non-compliance. The operation, called “OP Syahbandar“, runs from 4 to 8 May 2026 and involves 2,195 officers deployed across the country.

The cases under review are not random. LHDN has identified companies and taxpayers based on patterns that suggest potential underreporting, missed filings, or misuse of tax incentives.

Who Is Being Targeted

The operation covers three areas of taxation: corporate tax, non-corporate tax, and employer-related tax. LHDN Melaka is hosting the launch, with the manufacturing sector singled out as a primary focus area.

The types of cases flagged include companies reporting profit margins unusually low compared to their industry peers, businesses that have never been audited before, entities suspected of claiming tax incentives they may not be entitled to, and firms involved in cross-border transfer pricing transactions with related parties overseas.

Transfer pricing refers to how companies set prices when transacting with their own subsidiaries or affiliates in other countries. LHDN watches this closely because it can be used to shift profits out of Malaysia, reducing the amount of tax paid locally.

A Pattern of Escalating Enforcement

OP Syahbandar is the latest in a series of large-scale operations LHDN has run in recent years. In July 2025, the board launched Op Tuah, targeting 1,829 cases across four states. More recently, LHDN’s use of e-invoice data uncovered RM3.5 billion in unreported income, leading to nearly 39,000 voluntary disclosures.

The e-invoicing system, which went live in August 2024, has given LHDN more visibility into business transactions. That digital trail makes it harder for discrepancies between reported income and actual revenue to go undetected, and it is likely feeding into how the board selects its audit targets.

What This Means If You Earn Business Income

If you are a salaried employee with no other income sources, this operation is unlikely to affect you directly. Your employer handles your monthly tax deductions (PCB), and your obligations are relatively straightforward.

That changes if you run a business, freelance, or earn income that is not subject to automatic deductions. LHDN’s growing use of data cross-referencing means the gap between what you declare and what the board can independently verify is narrowing. Companies that have never been audited are no longer overlooked by default.

If you are a business owner, make sure your reported profit margins are consistent with your actual financials, your tax incentive claims are properly documented, and your records can withstand scrutiny. LHDN has previously stated that taxpayers who voluntarily disclose errors face lower penalties than those caught through audits, with voluntary disclosure penalty rates starting at 10% to 15% under Section 113(2) of the Income Tax Act 1967, compared to significantly higher rates imposed after an audit finding.

The personal income tax filing deadline for YA 2025 is 15 May 2026 for Form BE filers and 15 July 2026 for Form B. If you have not filed yet, or if there are discrepancies in your past returns, sorting them out now costs less than waiting for an audit.

Eloise Lau

As a creative content writer, Eloise has covered finance, business, lifestyle topics, and even moonlights as a singer-songwriter outside of RinggitPlus. Her current interests are learning the best ways to optimise spending and credit card hacks to gain more airline miles.

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