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Second day of tax grievances: Lim joins Wee in flagging refund delays

Second day of tax grievances: Lim joins Wee in flagging refund delays

KUALA LUMPUR: The issue of delayed tax refunds was raised for the second consecutive day in Parliament, with former finance minister Lim Guan Eng highlighting refund backlogs and unreasonable Inland Revenue Board (LHDN) assessments as key concerns for taxpayers.
Lim, who is the Bagan member of parliament, said taxpayers were questioning why they had not received their refunds within the stipulated 30-day period.
"Some companies have even reported having to wait more than three years to get their tax refunds. What is the total amount of outstanding tax overpayments?" he asked.
Lim added that taxpayers often complained of being pressured by unreasonable assessments issued by the LHDN.
He also raised concerns over enforcement of transfer pricing regulations, saying unclear procedures had led to confusion, particularly over recent requirements for companies to impose interest on funds transferred to subsidiaries, which are then deemed taxable income.
On Tuesday, Datuk Seri Dr Wee Ka Siong called for the LHDN to be restructured as an independent statutory body that reports to Parliament, rather than remaining under the Finance Ministry.
Wee, the MP for Ayer Hitam, said LHDN must not be seen as a political tool and should not follow the dictates of the executive, regardless of who is in power.
He also highlighted growing frustration among small and medium enterprises (SMEs), citing an increase in complaints over delayed tax refunds.
"This creates the perception that the government is borrowing the people's money without interest," Wee said, pointing to a case where a taxpayer who applied for a RM13,000 refund was offered only RM650, with the balance to be paid over four years.
Meanwhile, Lim called for the establishment of a special Taxpayer Tribunal to protect individuals and small and medium-sized enterprises (SMEs) from alleged unfair treatment by the LHDN.
There was growing complaints from taxpayers claiming they were pressured by questionable tax assessments and enforcement actions, including bank accounts being frozen without clear justification, he said.
He said that while LHDN's efforts to boost government revenue were commendable, these must be balanced with fair and reasonable enforcement.
"While we appreciate the board's efforts to increase national revenue, it must be balanced with fair and reasonable treatment to avoid arbitrary actions," he said when debating the 13th Malaysia Plan in the Dewan Rakyat today.
"I propose the formation of a special taxpayer tribunal to protect individuals and SMEs from feeling that they are being treated unfairly, victimised, or subjected to double standards in enforcement," Lim added.
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