THE government has been urged to expedite the refund of excess tax payments totalling RM29.919 billion owed to companies, particularly micro, small, and medium enterprises (MSMEs), to help alleviate their cash flow challenges.
Bagan Member of Parliament Lim Guan Eng stated that, according to the Federal Government’s 2025 financial statements, the outstanding tax refund commitment has decreased by RM3.425 billion to RM29.919 billion, down from RM33.342 billion in 2024.
He acknowledged the efforts of the Inland Revenue Board (IRB) in reducing the backlog, but noted that a balance of nearly RM30 billion remains a significant sum.
“These funds rightfully belong to companies that have overpaid their taxes to the government,” he said in a statement.
Lim noted that RM9 billion had been paid out to 130,000 companies as of September 30, 2026.
However, he argued that the refund process must be accelerated to assist the approximately 1.2 million MSMEs currently facing cash flow constraints.
“The tax refund commitment should be capped at RM10 billion. A commitment of RM30 billion places a burden on cash-strapped companies, especially MSMEs, as they contend with deteriorating business conditions and an uncertain global economy,” he said.
He further pointed out that the tax refund commitment stood at RM21.836 billion in 2021, before rising to RM25.721 billion in 2022 and RM25.511 billion in 2023.
In light of this, Lim urged those tasked with supporting MSMEs to be more consistent in pressing the government to expedite the refund of these excess tax payments.
He said a failure to advocate for the refund of monies rightfully belonging to micro, small, and medium enterprises (MSMEs) could create the impression that the relevant parties are not fulfilling their responsibilities appropriately.
In a related development, he noted that there has also been a significant increase in the two per cent annual compensation payments made under Section 111D of the Income Tax Act for delays by the Inland Revenue Board (IRB) in refunding excess tax payments. – October 21, 2026