Lim urges faster payment of RM29.919 billion tax refund backlog
The former finance minister proposed a RM10 billion ceiling on arrears, warning that delayed refunds were straining small businesses’ finances.
Former Malaysian finance minister Lim Guan Eng has called for faster settlement of RM29.919 billion in overdue tax refunds, saying the delays are squeezing businesses’ cash flow, particularly that of small and medium enterprises.
On October 21, the Bagan MP cited the 2025 Federal Government Financial Statements, which put unpaid refund liabilities at RM29.919 billion for 2025, against RM33.342 billion for 2024. He acknowledged the Inland Revenue Board’s (IRB) efforts to reduce the backlog but said the remaining amount belonged to businesses and should be returned sooner.
According to Lim, 130,000 companies received RM9 billion in refunds during 2026 up to September 30. He urged the government to accelerate payments, stressing the needs of Malaysia’s 1.2 million SMEs.
Lim proposed limiting federal tax refund arrears to RM10 billion. He said a backlog close to RM30 billion added financial pressure on companies facing difficult operating conditions, and criticised statutory agency leaders for not pressing harder for repayments.
He also highlighted rising compensation costs for late refunds. Lim said Section 111D of the Income Tax Act requires annual compensation of 2 per cent when IRB misses the prescribed refund deadlines. Payments under that provision reached RM109 million by September 30, 2026, compared with RM23.64 million during 2025.
