Income Sustainability Through Tax Governance in the Digital Age

This chapter critically analyses the role of effective tax governance in fostering income sustainability in Malaysia, an emerging market grappling with enhancing tax compliance and ensuring robust revenue generation. We delve into the state of tax compliance, identify the challenges impeding it, and underscore the necessity of tax governance in bolstering income sustainability. The strategies for enhancing tax compliance and related policy recommendations are dissected, illuminating their significance for Malaysia’s stable revenue base, facilitating public services, bolstering infrastructure development, and funding social programs. Five interconnected strategies for improving tax governance are discussed: reforming tax policies and administration, fostering a culture of voluntary compliance, leveraging technology, engaging in capacity building and training, and collaborating with international tax organizations. Each plays a crucial role in promoting a holistic, robust, and efficient tax system that supports Malaysia’s socioeconomic growth and long-term sustainability. While providing a comprehensive analysis of tax governance and income sustainability in Malaysia, the chapter underscores the need for ongoing research to inform effective policy responses and reforms. By exploring the impact of specific tax reforms, comparative tax governance systems, and the effects of emerging trends like digitalization, future research will serve as a blueprint for scholars and policymakers to create equitable tax systems supporting the well-being of present and future generations.