PM addresses tax woes by doubling refund allocations

PRIME Minister Datuk Seri Anwar Ibrahim has addressed some of the tax woes raised by local business owners by doubling the allocations for tax refunds, from RM2 billion to RM4 billion.

To recap, The Borneo Post had published a two-part commentary on Sept 26 and 27, 2025 focusing on some of the pressing issues that local business owners have been experiencing with the tax administration, such as systemic backlogs of tax appeals, opaque assessment practices, the absence of a model litigant principle, a lack of representation from Sarawak and Sabah within the appeals system, and of course, the lengthy tax refund process.

The lengthy tax appeal and refund processes were especially important pain points stressed by small business owners who had written to The Borneo Post as it negatively affected their cash flow and business activities.

The highlight of these issues had previously elicited a written response from Deputy Finance Minister Lim Hui Ying who clarified some issues, and most recently from Anwar who is also the Finance Minister.

Speaking at Sentuhan Madani programme at the Sabah International Convention Centre on Dec 6, Anwar announced that the federal government will move to resolve long-delayed tax refunds that have frustrated businesses for years, especially small firms that have complied with payment schedules but struggled to recover excess tax paid.

The Cabinet had initially set aside RM2 billion for outstanding refunds, but Anwar said he has approved an additional RM2 billion to expedite payments, bringing the total to RM4 billion.

“Some traders waited years for money that rightfully belongs to them. This caused real anger. If we demand efficiency from them, we must be efficient in returning what is owed,” he said.

He added that after returning to Putrajaya and reviewing the records, the complaints raised by Malay and Chinese business communities alike were valid.

“The government must respond swiftly. I don’t want traders, especially the small ones, to keep waiting,” he said.

The Prime Minister stressed that both decisions reflect the government’s commitment to practical economic reforms shaped by ground realities rather than rigid bureaucracy.

Overall, response from this announcement has been mixed with some business owners welcoming the special allocation while some of the public have deemed the move to be “too little, too late”.

For The Borneo Post, the PM’s decision shows that policy reform often begins with public discourse, and timely reporting plays a crucial role in shaping that conversation.

Malaysia’s tax system is now at an important juncture as the refund allocation increase addresses immediate hardship of affected taxpayers, but deeper reforms are still essential to restore confidence, fairness, and predictability for all taxpayers.

Some of the unresolved issues previously highlighted by The Borneo Post, include the need for a model litigant principle, setting statutory timelines for appeals, improving East Malaysian representation within the tax appeals process, and reviewing penalties and the “Pay First, Appeal Later” rule.