KUALA LUMPUR, Oct 21 2026, DAP MP for Bagan Lim Guan Eng has urged the government to expedite the repayment of RM29.919 billion in outstanding tax refund commitments to companies, particularly small and medium enterprises (SMEs), to help ease their cash flow and liquidity pressures.
In a press statement issued on Wednesday, Lim said the 2025 Federal Government Financial Statements showed that tax refund commitments had declined by RM3.425 billion, from RM33.342 billion in 2024 to RM29.919 billion in 2025.
He credited the Inland Revenue Board (LHDN) for reducing the amount owed to companies that had overpaid their taxes but stressed that the outstanding sum remained substantial.
“Nearly RM30 billion owed by the government to companies that paid excess taxes is still large by any standards, especially when these are the companies’ own money,” he said.
Lim noted that the government had paid RM9 billion in tax refunds to 130,000 companies as of Sept 30, 2026.
However, he called for faster repayments, particularly to the country’s 1.2 million SMEs, which he said needed access to their own funds amid deteriorating business conditions and an uncertain global economic outlook.
He proposed capping outstanding tax refund commitments at RM10 billion, arguing that the existing level of nearly RM30 billion placed an unnecessary financial burden on businesses, especially SMEs facing cash flow constraints.
Lim also highlighted historical figures showing that tax refund commitments stood at RM21.836 billion in 2021 before rising to RM25.721 billion in 2022 and RM25.511 billion in 2023.
He called on those responsible for representing and supporting SMEs, including officeholders in statutory positions, to consistently pressure the government to accelerate tax refunds.
Failure to persistently push for the repayment of money owed to SMEs could create the unfortunate impression that those responsible were “sleeping on the job”, he said.
Meanwhile, Lim acknowledged progress in compensation payments under Section 111D of the Income Tax Act for delays by LHDN in refunding excess taxes paid.
He said RM23.64 million was paid in compensation in 2025, while RM109 million had already been paid during the first nine months of 2026, up to Sept 30.
The latest figure represented an increase of nearly five times compared with the total compensation paid in 2025, highlighting the need to address delays in tax refunds.
Lim reiterated that the government should prioritise returning excess tax payments to businesses promptly, enabling them to manage operating costs, maintain liquidity and sustain their operations.
-MINUTESMY-
