Malaysian businesses face tax refund delays up to two years despite improving se

KUALA LUMPUR, Jan 16 — Malaysian businesses are experiencing prolonged tax refund delays, with nearly a quarter waiting over two years for overpaid taxes, according to a survey by the Associated Chinese Chambers of Commerce and Industry of Malaysia (ACCCIM), though sentiment is cautiously improving for early 2026.

The survey found that 22.9 per cent of respondents reported tax refund delays exceeding 24 months.

Another 20.6 per cent have been waiting between 13 and 24 months, while 22.3 per cent reported delays of 7 to 12 months.

Over 76 per cent of businesses said an acceptable maximum duration for overpaid tax refunds should be within three months.

"In designing Malaysia’s tax refunds, the Inland Revenue Department can consider drawing inferences from some regional countries’ practices," ACCCIM president Datuk Ng Yih Pyng said.

He suggested improvements like shorter refund timelines, automatic compensation for delays, and a more flexible estimation system to prevent overpayment.

Ng also praised the government's fiscal policies, including a reduction in service tax rate to 6 per cent on rental services and a one-year transition period for e-invoice implementation.

The ACCCIM thanked Prime Minister Datuk Seri Anwar Ibrahim for his personal assurance to expedite overpaid tax refunds.

"I think this is a relief for many," said Lee Heng Guie, executive director of the Socio-Economic Research Centre.

Despite liquidity concerns, the survey revealed a shift toward "cautious positive sentiments" for the first half of 2026, driven by supportive fiscal policies in Budget 2026.

Expectations improved following a cooling period in late 2025, with businesses optimistic about lower interest rates and economic stability.