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THE Malaysian Inland Revenue Board (LHDN) has revealed a major tax compliance breach involving a company suspected of participating in a luxury vehicle trading cartel, resulting in an estimated RM70 million in unreported revenue.
In a statement issued on Tuesday, LHDN confirmed that the enforcement operation was part of broader government efforts to dismantle entrenched cartels and smuggling syndicates that have long undermined the nation’s revenue.
“The simultaneous operation involved three locations around the Klang Valley: the company’s business premises, the director’s residence, and an auditing firm,” LHDN said, noting that the raids were carried out at these key sites.
The authority added that the searches were conducted to secure documents and other evidence relevant to the tax non-compliance.
“Preliminary investigations found that the company failed to report its actual income from sales transactions, with an estimated amount of around RM70 million,” the statement said.
The case is currently being investigated under subsection 112(1A) of the Income Tax Act 1967 in relation to the company, and paragraph 113(1)(a) of the same act concerning its director.
LHDN Chief Executive Officer Datuk Dr Abu Tariq Jamaluddin confirmed the operation and stressed its role in promoting targeted compliance, particularly in sectors involving high-value transactions such as luxury vehicles.
“Non-compliance involving such large amounts not only hampers national revenue but also undermines the fairness of the taxation system and must not be taken lightly,” he said, emphasising the serious impact of large-scale tax evasion.
LHDN noted that ongoing and forthcoming prosecutions extend beyond this case, covering activities including gold mining, scams, misuse of welfare status to obscure transactions, gambling proceeds, other illegal activities, and foreign-owned businesses failing to report income.
“This step demonstrates LHDN’s continued commitment to ensuring that all parties comply with tax regulations and to prevent leakage of national revenue,” Dr Abu Tariq added, highlighting the authority’s ongoing dedication to safeguarding public funds. - November 18, 2025