A modern tax system was first introduced into the Federation of Malaya by the British in 1947. This was subsequently repealed and replaced by the Income Tax
Act 1967, which came into effect on 1 January 1968. Subsequently, the Inland Revenue Board (IRB), formerly known as the Inland Revenue Department (IRD), was created as the government agency that has the responsibility for collecting income taxes for Malaysia. As with other tax collecting agencies, it has to deal with the problem of income tax non-compliance.