Economic crime is draining Malaysia of billions

KUALA LUMPUR, Malaysia (MNTV) — Malaysia loses billions of ringgit annually to economic crime, reports The Straits Times.

According to the Malaysian Anti-Corruption Commission (MACC), between 2018 and 2023, Malaysia lost 277 billion Malaysian ringgit ($53.17) to corruption.

In the latest Corruption Perception Index released by Transparency International, Malaysia’s score remained unchanged at 50 out of 100 (100 is defined as very clean and 0 highly corrupt). 

Malaysia ranked 57th out of 180 countries surveyed in the 2024 results.

Apart from corruption, another contributor to economic crime in Malaysia is the shadow economy.

Also known as the underground economy, it is a significant cause of tax losses, which are estimated to be as high as 30.2 per cent of GDP.

Examples of shadow economy activities include smuggling of weapons, tobacco and drugs; prostitution; tax evasion; illegal and online gambling; passport fraud; and human trafficking.

The shadow economy also encompasses unregistered formal sectors and unreported income from the production of legal goods and services, such as unlicensed businesses, freelancers, part-time workers and the cash economy.

This includes the substantial income from informal work that is generated by those who have permanent employment.

In some cases, this informal income can be larger than their permanent income.

Money-changers are the ideal conduit for money laundering as they deal in cash.

Small businesses such as restaurants, launderette, hair salons and car wash, act as front companies for these illegal operations.

Bukit Aman’s Commercial Crime Investigation Department said there were 41,701 commercial crime cases last year.