Lim Guan Eng: RM30b GST refund ‘nightmare’ must not happen again

KUALA LUMPUR, Dec 22 — Lim Guan Eng has called on Deputy Prime Minister and BN chairman Datuk Seri Ahmad Zahid Hamidi to ensure that the financial nightmare faced by taxpayers from unpaid GST refunds, totalling more than RM30 billion between 2015 and 2018, is not repeated should the goods and services tax (GST) be reintroduced.

In a statement today, the DAP MP for Bagan noted that Ahmad Zahid, when announcing BN’s plan to seek GST reinstatement after the 16th General Election, described GST as the “most suitable and effective system” to ensure fairness and bolster national revenue.

“Before pushing for GST, Ahmad Zahid must first guarantee that the nightmare of GST refunds not paid, amounting to RM30 billion during its initial implementation from 2015 to 2018, will never recur,” Lim said.

He added that the GST, as a consumption tax, is designed to be fair and efficient, requiring refunds of input taxes to avoid double taxation. 

“Unfortunately, the BN government failed to issue GST refunds as legally required, creating a massive RM30 billion backlog over just three years. This burdened businesses, affecting both cash flow and operational continuity,” Lim said.

The unpaid GST refunds were eventually settled by the newly-elected Pakatan Harapan government in 2019. 

However, Lim highlighted that the problem resurfaced in 2020 under the Inland Revenue Board (LHDN), with businesses owed tens of billions of ringgit in excess taxes paid but not refunded since then.

“This has resulted in a recurring nightmare for businesses, not receiving refunds on excess taxes paid each year since 2020,” Lim said, urging the current government to start returning some of these funds, suggesting a RM20 billion refund to help businesses enjoy a prosperous Chinese New Year in 2026.

Lim also questioned Ahmad Zahid’s plan to eventually reinstate GST, stressing that any return of the tax must include safeguards to prevent a repeat of the RM30 billion unpaid refunds crisis under BN from 2015 to 2018.

Ahmad Zahid previously said BN would allow the existing Sales and Service Tax (SST) to continue for now, but intended to reintroduce GST post-16th General Election. 

Lim asked whether a solution is in place to avoid a recurrence of the massive financial setback experienced by businesses under the previous GST system.