THE RM22.45bil in tax refunds for overpaid taxes in 2025 was the highest in five years, the Finance Ministry said in a written parliamentary reply on Tuesday.
It said RM56bil was paid between 2023 and 2025, an amount 50% higher than the RM37bil refunded during the period from 2020 to 2022.
“Of this amount, RM7.5bil was paid in December 2025, compared with the initial commitment of RM4bil announced by the Prime Minister on Dec 6, 2025,” it said.
“All outstanding tax overpayment cases for 2022 and earlier that were eligible for payment were fully settled in 2025. The settlement of these refunds involved 3.7 million cases in 2025, compared with 2.7 million cases in 2024.
“Although the government pledged to resolve cases for the 2023 year of assessment in the first quarter of 2026, we are confident of completing them earlier, in February 2026,” the statement read, adding that as at Feb 16, a total of RM6.2bil involving 95,282 cases has been refunded.
The ministry is also targeting to complete the refunds for 2024 by year end.
“Refunds for tax overpayments for 2024 are targeted to be completed before the end of this year. At the same time, refunds regardless of the age of the case will continue to be made to all taxpayers other than companies, particularly individual taxpayers.”
It said various approaches have been undertaken to ensure that refunds are made to taxpayers within the stipulated time frame, including prioritising refunds based on the age of outstanding arrears; full settlement of individual tax overpayment arrears; and prioritising micro, small and medium enterprises or companies experiencing cash flow difficulties.
If taxpayers do not receive a refund or any notification regarding their tax overpayment within the stipulated period, they are advised to contact the Inland Revenue Board (LHDN) office handling their respective tax files or any nearby LHDN office.
“The government remains committed to ensuring that tax overpayment refunds are fully implemented fairly, transparently, and equitably, taking into account the interests of all taxpayers and strengthening business confidence,” it added.
It said these measures reflect the ongoing efforts to enhance tax administration efficiency and safeguard taxpayers’ rights, in line with the government’s fiscal reform agenda.
The ministry was responding to a question by Ahmad Fadhli Shaari (PN-Pasir Mas) on the total amount of tax overpayments by category of taxpayer for the years 2023 to 2025, and the reasons why tax refunds could not be settled in the subsequent year of assessment and were instead paid in instalments over a four-year period.
Meanwhile, the ministry revealed that some 200,000 taxpayers have been issued CP500 notices by LHDN, involving an estimated RM1.11bil in tax payments.
The CP500 is a tax instalment notice issued to individuals who have non-employment income such as from businesses, rentals or royalties.
“The government acknowledged that a number of taxpayers who only earn employment income also received the CP500 due to inaccurate reporting in their tax returns, where part of their employment income was mistakenly declared as non-employment income,” the ministry said in a parliamentary written reply dated Tuesday.
The LHDN is taking steps to cancel these notices, and affected taxpayers can submit an amendment application (CP502) together with their EA/EC form to the CP500 Help Desk via mejabantuanCP500@hasil.gov.my.
