Blockchain in Malaysian taxation: unleashing opportunities for an effective and transparent process

Greater awareness and engagement are needed to ensure high compliance among taxpayers. As such, the tax authority in Malaysia has introduced numerous improvements and enhancements to its systems and technology, ensuring a smooth tax service delivery process for taxpayers. Blockchain technology has the potential to transform the tax system by enhancing transparency, efficiency, and security in tax administration and compliance, but it hasn't yet been implemented in Malaysia. Thus, this study aimed to understand the current practices and challenges in the taxation system and to explore the potential of using blockchain technology in Malaysia. Using a qualitative approach, semi-structured interviews were conducted with 12 respondents: tax officers, tax agents, and a Ministry of Finance (MoF) officer involved in tax policy. Thematic analysis was employed for data analysis. The findings revealed that, although the tax authority is aware of blockchain technology, its implementation will take longer due to the complexity and the need to involve multiple parties. The main findings of this study provide insights for external users and policymakers regarding the potential of blockchain technology within the Malaysian taxation framework. This study contributes to understanding how blockchain can enhance tax transparency by proposing a model for blockchain adoption in the tax system.