The real challenge of tax transparency and governance is not disclosure. It’s scrutiny

For a long time, tax transparency was treated as a compliance exercise—important but kept within reporting cycles and tax teams. Times have changed.

With tighter regulations and real-time reporting, tax has moved into a different category altogether. It now sits at the intersection of supply chains, investment decisions, operational models, enterprise risk and corporate reputation. In practical terms, while compliance remains fundamental, tax is no longer merely an obligation to meet. It has become one of the clearest signals of governance quality.  This is the shift that should now be on the radar of every Chief Finance Officer (CFO), Chief Risk Officer (CRO), and Head of Tax (HoT).

Increasingly, stakeholders are asking tougher questions, probing beyond polished disclosures and carefully worded principles. They want to know who owns tax risk, how decisions are made, what happens when issues arise, and whether the Board can genuinely stand behind the organisation’s tax profile. This shift was a defining theme at PwC Malaysia’s Tax Transparency and Governance Forum 2026, where HoTs, CFOs and representatives from the Inland Revenue Board of Malaysia (IRBM) discussed what tax transparency now demands of businesses. Three realities stood out.

First, transparency without governance will not hold

The credibility of tax transparency does not come from the disclosure itself. It comes from the governance behind it. Clear tax policies, standard operating procedures, effective controls, escalation pathways and visible accountability are what make disclosures defensible. Together, these form an organisation’s governance toolkit, allowing them to not only have an answer but be able to confidently stand behind it when regulators, investors or other stakeholders begin looking beyond the numbers.

This matters because disclosure is easy to publish, but much harder to sustain under pressure. Without strong governance, transparency can quickly become a vulnerability rather than a strength. 

Second, tax risk has outgrown the tax function

Tax can no longer be treated as a specialist matter left to tax and finance teams. It is part of strategic decisions, business operations, investment planning and enterprise risk management.  That makes tax risk ownership a leadership issue. Tax risk must be considered by senior management, risk leaders and Boards the same way they engage with other material risks. Is tax risk clearly owned, understood, and escalated? Where the answer is unclear, governance gaps often start to emerge.

Third, many companies are closer than they think—but still not where they need to be

The gap is often not capability, but formalisation of people, processes and platforms. Many organisations already have good tax practices, experienced people, and functioning controls. However, these are often informal, undocumented or dependent on individuals rather than embedded in the business.

Documenting what is already being done, clarifying responsibilities and extending tax awareness beyond the tax team will help with formalisation. Because tax consequences regularly arise in procurement, legal, HR, operations and commercial decisions, stronger governance depends on recognising these moments in the wider business and knowing when tax needs a seat at the table.

Is Corporate Malaysia ready?

There are encouraging signs. PwC’s 2026 Global Tax Transparency and Tax Sustainability Reporting Study found that Malaysian companies (first year reviewed under this study) scored 10% above the global average¹, with particularly robust performance in disclosures on their Approach to Tax. That suggests Malaysian businesses are saying the right things. But the next phase is not about articulation. It is about proof. 

• Can companies demonstrate the governance behind the narrative?  

• Who owns tax risk in a company? 

• Are tax practices formalised, applied consistently and understood across the business? 

These are no longer technical questions. They are governance questions.  And that is why the next chapter of tax transparency will not be defined by who says the most, but by who can credibly show that tax is governed with discipline, accountability, and foresight.