Kuala lumpur: The Inland Revenue Board (IRB) has devised a more fair and equitable strategy to ensure that the refund allocations provided by the government can be distributed in an orderly manner, the Finance Ministry said.

According to BERNAMA News Agency, the ministry outlined its strategies in a written reply published on the parliament website. One key strategy is prioritising micro, small, and medium enterprises (MSMEs) or companies experiencing cash flow problems by adopting the First In First Out concept. This approach aims to distribute excess tax refunds evenly based on the age of the arrears and to make full payments for excess tax refund arrears for individual taxpayer categories.

Additionally, tax legislation amendments have been introduced to allow taxpayers to conduct a review in the 11th month, rather than the sixth or ninth months, or both. This additional review facility is intended to ensure that the estimated tax payments align closely with the actual tax liability, thereby reducing the government's excess tax refund.

The ministry's response was in reply to a question from Datuk Seri Wee Ka Siong (BN-Ayer Hitam) regarding the amount of excess tax arrears that remain unsettled for taxpayers, including SMEs, as well as the government's objectives for 2026, including the settlement period and mechanisms to prevent new arrears.

The IRB has settled a total of RM22.45 billion in excess tax refunds for 2025, involving 3.6 million taxpayers, which includes MSMEs.