MCA President Datuk Seri Dr Wee Ka Siong has highlighted growing frustration among taxpayers over delays in the disbursement of income tax refunds, particularly affecting the M40 and B40 groups.
Speaking during the third session of the 15th Parliament today, he urged the government to address inefficiencies and implement stricter timelines.
"I wish to raise the issue concerning the method of refunding excess taxes, which is increasingly burdensome for taxpayers.
“Many members of the public, particularly the M40 and B40, have complained that the refund process by the Internal Revenue Board (LHDN) takes too long, even though official guidelines stipulate it should be completed within 30 days after the submission of Form BE," he said.
"In reality, many have to wait three to six months, and some more than a year, to receive funds that are rightfully theirs."
He questioned the government’s commitment to efficiency, noting that delays in refunds undermine household cash flow, especially amid rising living costs.
Dr. Wee also raised concerns about inconsistencies between LHDN’s online portals and branch instructions, which sometimes force taxpayers to resubmit documents unnecessarily.
"Is the government’s refund system being used as a ‘forced loan’ while using taxpayers’ money without consent?" he asked. "It is time to move to fully automated straight-through processing, which would allow refunds to be credited directly to taxpayers’ accounts within a short period, except for cases requiring detailed audits."
The Ministry of Finance responded that most refunds for the 2024 assessment year for non-business individual taxpayers had been processed within the stipulated 30 working days, and delays were primarily due to incomplete or inaccurate submissions requiring further verification.
LHDN also maintains internal audit mechanisms, undergoes annual SIRIM audits for compliance with ISO 9001:2015 quality management standards, and is subject to the National Audit Department’s oversight.
To ensure accountability, taxpayers are entitled to 2 per cent compensation under Section 111D of the Income Tax Act 1967 if delays are not caused by their errors.
The ministry said refunds are processed through Electronic Fund Transfer, DuitNow, cheques, and Telegraphic Transfers, with EFT as the primary method.
The ministry added that taxpayers who do not receive refunds within 30 days of submitting their BNCP are advised to contact the relevant LHDN branch.
Continuous improvements have been made to the process to comply with legal requirements and the LHDN Customer Charter, reinforcing transparency and public confidence in Malaysia’s tax system. - November 3, 2025
