IRB Develops Fairer Strategy To Distribute Tax Refunds, Prioritising MSMEs

KUALA LUMPUR, Jan 28 (Bernama) -- The Inland Revenue Board (IRB) has devised a more fair and equitable strategy to ensure that the refund allocations provided by the government can be distributed in an orderly manner, the Finance Ministry said.

In a written reply published on the parliament website, the ministry said that among its strategies is to consider giving priority to the micro, small and medium enterprises (MSMEs) or companies experiencing cash flow problems by adopting the First In First Out concept.

This includes distributing excess tax refunds evenly based on the age of the arrears and making full payments for excess tax refund arrears for individual taxpayer categories.

“Tax legislation amendments have also been made to allow taxpayers to make a review in the 11th month, as opposed to a review in the sixth or ninth month or both.

“Through this additional review facility provided, the estimated tax payment that needs to be made should be close to the actual tax liability that needs to be paid by the company, and this will in turn reduce the government’s excess tax refund,” it said.

The ministry was replying to a question from Datuk Seri Wee Ka Siong (BN-Ayer Hitam) on the amount of excess tax arrears that have not been settled so far for taxpayers, including SMEs, as well as the government’s target for 2026, including the settlement period and mechanisms to prevent new arrears.

The total amount of excess tax refunds for 2025 that have been settled by the IRB is RM22.45 billion, involving 3.6 million taxpayers, which includes MSMEs.

-- BERNAMA