KUALA LUMPUR, Jan 26 — The Malaysian government has accumulated RM33.3 billion in outstanding tax refund commitments between 2020 and 2024 — a figure former economy minister Datuk Seri Rafizi Ramli suggested could be concealing the country’s actual fiscal deficit.

Speaking in the Dewan Rakyat this evening, the Pandan MP said the delay in returning overpaid taxes to individuals and companies effectively allows Putrajaya to report higher revenue than it genuinely retains. 

He described this as a consequence of “cash accounting”, where revenue is recorded upon collection without deducting funds owed back to taxpayers.

Rafizi noted that federal tax refund commitments rose from RM14.6 billion in 2020 to RM33.3 billion by 2024, and estimated the total could “well surpass RM33 billion” for 2025.

“We need to ask a fundamental question: Why has the Ministry of Finance — under both the Perikatan Nasional government and the current Madani administration — failed to return overpaid taxes to individuals and companies to the extent that the amount has surged to RM33.3 billion?” he said during the debate on the Motion of Thanks to the Agong.

“But this issue goes deeper than that. It is linked to the national economic narrative. We have been telling the world that we have good fiscal deficit... that we have reduced our fiscal deficit from one year to another.

“However, if we factor in the unreturned tax, what would the actual deficit look like once these outstanding refunds are finally paid out?” he added.

Prime Minister Datuk Seri Anwar Ibrahim told Parliament in December last year that his government could reverse decades of fiscal deficit by 2028 or 2029 if it commits to reforms that limit new borrowings and “prudent spending”.

The Tambun MP said his administration is on course to narrow the deficit after three years of back-to-back decrease since 2023. 2025’s fiscal deficit is expected to be 3.8 per cent of GDP, 2 per cent less since he took office three years ago.

Total new borrowings stood at over RM100 billion in 2021, but declined to around RM75 billion four years later.

The MOF is obligated to address Rafizi’s allegation when the ministry winds up the motion of thanks for the royal address debates in the current sitting.