RM30b tax refund delay threatens SME liquidity crisis, warns Lim

KUALA LUMPUR — Former finance minister Lim Guan Eng has raised alarm over an estimated RM30 billion in outstanding tax refunds owed to small and medium enterprises, cautioning that the delay could trigger a liquidity crisis among the country's crucial business segment.

Lim urged the federal government to prioritize the clearance of the backlog, emphasizing that timely refund disbursements are essential for SMEs to maintain operational cash flow and meet their financial obligations.

The mounting refund arrears have created mounting pressure on small business owners, many of whom depend on swift reimbursements to fund working capital and sustain employment. The delay compounds existing economic headwinds affecting the SME sector, which contributes significantly to Malaysia's employment and economic output.

Government agencies have faced challenges in processing refund claims due to administrative constraints and verification procedures, though officials have previously committed to accelerating the clearance process. Business groups and industry associations have similarly called for expedited action to alleviate financial strain on enterprises.