Lim Guan Eng Urges Full Tax Refunds Buy Local Policy To Ease Business Cash Crunch

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The Bagan MP said a proposed RM20 billion tax refund payout before Chinese New Year could inject much-needed liquidity into the business sector. — Picture by Yusof Mat IsaKUALA LUMPUR, Dec 14 — DAP adviser Lim Guan Eng has called on Prime Minister Datuk Seri Anwar Ibrahim to immediately release tens of billions of ringgit in excess tax refunds allegedly withheld by the Inland Revenue Board (LHDN), warning that continued delays are deepening a cash squeeze faced by Malaysian businesses and eroding confidence in the unity government.
In a statement today, Lim said there was “no moral, ethical or legal right” for government agencies to retain excess taxes paid by companies, arguing that swift refunds — coupled with stronger support for local producers — would provide the fastest relief to struggling firms, particularly small and medium enterprises (SMEs).
“There is no moral, ethical or legal right for government departments to withhold paying back full refunds when this is the taxpayers’ own money,” he said.
Lim, who is a former finance minister, said the current situation mirrored the failure to pay Goods and Services Tax (GST) refunds under the Barisan Nasional administration before 2018, which he said had caused widespread hardship before being resolved under Pakatan Harapan (PH).
“The more than RM30 billion in GST refunds held back before 2018 under the BN administration were paid back by the new PH administration beginning in 2019,” he said.
He said excess taxes paid by companies began to be withheld again in 2020, with outstanding refunds now estimated to run into “tens of billions of ringgit”.
According to the Bagan MP, the estimates were based on published data and complaints received nationwide by DAP elected representatives, involving cases ranging from RM100,000 withheld over five years to sums exceeding RM100 million since 2020.
While acknowledging that the unity government has begun refunding some of the excess taxes, Lim urged faster action, proposing a RM20 billion payout in January 2026 ahead of Chinese New Year, which falls on February 17 and 18, to inject liquidity into the economy.
“RM20 billion in excess tax refunds paid next month in January before the Chinese New Year will help overcome the current cash squeeze and generate tremendous goodwill to the prime minister from businesses,” he said.
“This RM20 billion in January 2026 will also go a long way towards addressing the problem, which hopefully can be resolved by the end of next year.”
Lim also linked the cash squeeze to external trade pressures, saying global tariff disputes — particularly those involving the United States — had led to the dumping of foreign goods and shrinking order books for local firms.
“The tariff war of Donald Trump has hurt Malaysian businesses with the dumping of foreign goods, forcing many to face declining or no new business orders,” he said.
To counter this, Lim proposed a new policy requiring compulsory government purchases of at least 50 per cent local products, saying it would help sustain domestic demand and support SMEs.
“Companies, especially SMEs, need help to generate new business orders to help overcome the current cash squeeze,” he said. - malaymail

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