There is a serious concern regarding the recent case in which a business publicly appealed to the Inland Revenue Board (LHDN) for the return of outstanding tax refunds. This delay does not appear to be an isolated incident but rather, reflects a serious, widespread challenge faced by small and medium enterprises (SMEs) across the country. The government should take prompt and decisive action to comprehensively review the existing tax refund procedures, with the aim of accelerating the verification and disbursement process. This is essential to prevent businesses from being placed under undue pressure on their cash flow.

The current economic climate is already challenging, with many businesses experiencing strained cash flow. At the same time, a number of policies implemented in recent years - such as increases to the minimum wage, the introduction of e-invoicing, the expansion of the Sales and Service Tax (SST) base, adjustments to subsidies and electricity tariffs, and the mandatory EPF contributions for foreign workers - have added to operational costs. In this context, the prolonged delay in returning  tax refunds owed places an additional, considerable burden on companies.

Businesses are simply asking for the refunds they are rightly due. Unreasonable delays in processing these refunds, however, risk pushing them toward an unsustainable position.

MCA President Datuk Seri Ir Dr Wee Ka Siong has raised this issue of delayed refunds on multiple occasions in Parliament, highlighting that many local SMEs have reported excessively long waiting times for tax reimbursements from LHDN. Such delays are not only inconvenient for taxpayers but also directly impact companies’ cash flow and operations, with potential indirect consequences for the wider national economy.

SMEs form the backbone of our national economy. Delays in tax refunds, however, are gradually eroding their capacity to sustain operations. If these delays persist, they could further disrupt sound tax planning, unsettle the broader business environment and, ultimately, hinder national economic progress.

We urge LHDN to take immediate steps to settle all overdue refund applications. At the same time, we encourage the establishment of a more transparent, accessible, and traceable refund mechanism. This would help restore public confidence in the system and ensure that businesses receive the support they need during these challenging times.

Datuk Ir Lawrence Low
MCA Vice President
MCA Economic and SME Affairs Committee Chairman

4 December 2025

-MCA Comm-