Oct 21, 2025
3 min read
DATUK DR MAH HIMSELF RECOVERED.
The MCA is very concerned about the challenges faced by businesses due to delays in tax refunds.
The combination of global economic uncertainty, tariff policy adjustments and rising operating costs have put the company's cash flow under unprecedented strain.
We shared the views expressed by Datuk NG PYNE, President of the Chinese Chamber of Commerce in Malaysia.
We believe that the issues identified through ACCCIM's work are not limited to any particular sector, but are broader challenges across the industry.
While tax payment is the responsibility of businesses, it is the government's responsibility to process returns on time.
When obligations are met by companies while commitments by the administration are delayed, trust in the process slowly erodes.
There are three main factors contributing to this situation.
- Firstly, delays in refunds may result from tax management priorities.By managing competing demands, the government can wisely prioritize the allocation of funds for basic infrastructure, social assistance or debt service.However, when tax refunds are treated as recurring deferred payments, short-term fiscal stability can come at the expense of business liquidity and market confidence.
- Second, administrative efficiency in tax administration can be improved.Some taxpayers reported that even with full documentation, they faced several layers of verification, manual processes and reviews, pushing the time range to six months or more.Paid relationships with the Buia System appeared to create botheneckes that did not exist with modern administrative standards and standards.
- Third, there may be inconsistencies in the implementation of the writing and communication gap.Different interpretations in sections seem to create more burden for businesses.With the low concentration of companies, companies find it difficult to monitor the payment situation, which leads to uncertainty and anxiety.
These challenges create serious challenges for businesses.
- Cash flow constraints are particularly challenging in the current high interest rate environment.Many businesses are forced to seek expensive short-term financing to plug gaps, which effectively means the government uses interest-free business funds during the delay period.
- SMEs are disproportionately affected.With limited financial buffers, deferred refunds can directly affect their ability to pay for payroll, purchase supplies and carry out operations.Some have even had to consider reducing size or delaying expansion plans.
- Affects investment confidence.When international investors see inefficiencies in the tax administration, they raise concerns about the outlook for Malaysia's business environment.
- Supply chain and pricing pressures are emerging.As companies face cash constraints, some may need to adjust prices or pass on costs, which could increase inflationary pressures.
- Most importantly, trust is broken.When management practices are not aligned with policy commitments, it creates a performance gap that can have long-term consequences for the relationship between business and government.
We would like to make five useful suggestions in response to this:
- Establishing a long-term recovery framework as practiced in other countriesEstablish transparent processes (such as 90 days) with appropriate confidentiality to avoid delays in achieving compliance on commercial issues.
- Develop a comprehensive electronic refund tracking system through the Board of Internal Revenue.A transparent digital platform allows companies to monitor reimbursement status in real time, reducing uncertainty and improving communication.
- Introduce tiered processing with fast track options for compliant companies with clear financial records.This will reward compliance and reduce unnecessary bureaucracy.
- Consider creating a dedicated Treasury repayment account.Setting aside funds for reimbursement purposes would ensure their availability and increase transparency in budget execution.
- Cooperation with partners with acccim and other business organizations.Create a platform for information management, company representatives, and make the agreement to return to inform the policy.
The relationship between tax authorities and businesses is based on understanding and trust.
While a business always meets its tax obligations, it is important that the organization honors its debt repayment commitments.
Through constructive dialogue and practical improvements, we believe we can work together to restore confidence and strengthen Malaysia's economic foundations.
DEDEK DR MAH HANG SOON
MCA Vice President
