(Penang, 14th) Bagan Member of Parliament Lim Guan Eng urges the government to fully refund overpaid tax amounts in the near future and to mandate the procurement of 50% local products, as this will help Malaysian businesses overcome current cash flow difficulties.
He pointed out that after he wrote to Prime Minister Dato’ Seri Anwar to stress the need for fiscal, monetary, and tax reforms in order to rebuild Pakatan Harapan supporters’ confidence in the government, comparisons relating to tax refunds have appeared in society.
“On one hand is the hundreds of billions of ringgit of overpaid taxes paid by current taxpayers, yet to be fully refunded by the Inland Revenue Board (LHDN); on the other hand is the over 30 million ringgit in Goods and Services Tax (GST) refunds owed by the Customs Department since 2018.”
He stated in a press release that whether it is the current inability of LHDN to issue full tax refunds, or the Customs Department’s failure to refund GST in 2018, these two bureaucratic failures have already caused immeasurable difficulties to Malaysian businesses.
“Government departments have no right on moral, ethical, or legal grounds to withhold refunds that should be fully returned, because this money rightfully belongs to the taxpayers.”
Lim Guan Eng cited that the amount of GST refunds withheld before 2018 during the Barisan Nasional government’s tenure exceeded RM30 billion, all of which were gradually refunded by the new Pakatan Harapan government coming to power in 2019. However, from 2020, the Perikatan Nasional government began withholding the excess tax paid by businesses. “The current Unity Government is beginning to gradually fully refund these overpaid taxes by Malaysian businesses. “
He added that the estimated hundreds of billions of ringgit withheld by the LHDN is based on public official data, as well as specific cases collected from a large number of complaints received by several DAP elected representatives nationwide.
“In these related cases, the amounts of overpaid taxes withheld but not refunded range from as little as RM100,000 within 5 years, to over RM100 million since 2020.”
“If the government can refund RM20 billion in overpaid taxes by January next year, before Chinese New Year, it will help alleviate the current cash flow problems of businesses and build significant goodwill and trust for the Prime Minister within the business community. This RM20 billion expected to be refunded in January will greatly help the resolution of the problem, with hopes of a complete resolution by the end of next year.”
Businesses, especially small and medium enterprises, Lim stated, need assistance to secure new orders in order to overcome the current cash flow crisis. “The tariff war started by (U.S. President) Trump has led to foreign goods dumping, causing a severe impact on Malaysian businesses, forcing many to face reduced or even zero new orders. The Prime Minister can assist by introducing a new policy that requires the government and related agencies to mandate at least 50% procurement of local products.”
