The Muamalat Newsletter Vol. 1 2024

FEM eNewsletter | June 2024 32 Tax on Digital Economy in Malaysia: Suggestions for Future Research IzlawanieMuhammad Faculty of Economics and Muamalat Universiti Sains Islam Malaysia strategies are being used to modernise the tax system for the digital economy. However, there are challenges in the way of these initiatives, like concerns with data governance and developing a cybersecurity culture. Several other issues have also been brought up, including definitional clarity, the possibility of double taxation, implementation openness, the reporting of data on the digital economy, and audit case selection procedures (Said et al., 2022). There is a dire need to solve these problems by filling the taxation-related research gaps in the digital economy. Digital Economy in Malaysia In 2021, Malaysia was recognised as one of the most digitised countries globally, with a significant portion of the population embracing technology. Over 95% of Introduction The global economy experienced significant transformation due to the rapid progress of digital technology, resulting in theemergence of the “digital economy.” Worldwide, governments and tax authorities have faced both possibilities and challenges due to this transformation. Revenue authorities face enormous challenges as we move from the third to the fourth industrial revolution, which is marked by a massive digital economy and disruptive technology. While these developments make tax administration more complex, they also present chances to improve the effectiveness of the tax system through breakthroughs in big data, blockchain, robotics, andartificial intelligence (Evans et al., 2022). In Malaysia, both direct and indirect taxation