KUALA LUMPUR, April 28 — Lim Guan Eng has questioned whether Malaysia’s rising tax collection is putting pressure on businesses, warning that overburdening companies could undermine long-term revenue growth.
In a Facebook post today, the former finance minister pointed to Prime Minister Datuk Seri Anwar Ibrahim’s announcement that the Inland Revenue Board of Malaysia (LHDN) collected a record RM204 billion in direct taxes in 2025 — a 10.4 per cent increase year-on-year — and asked if such gains risk “killing the golden goose”.
He argued that the jump in tax collection appears disproportionate to Malaysia’s economic growth, noting that gross domestic product (GDP) expanded by just 5.2 per cent in the same year.
“If LHDN can increase its tax collection by 10.4 per cent, then the natural conclusion is that business profitability must have grown at a similar pace. However, this is not the case,” he said.
Lim claimed many businesses — particularly micro, small and medium enterprises (MSMEs) — are facing declining revenues and profits, with only selected sectors such as banking performing strongly.
He warned that without thriving businesses generating income, the government’s ability to sustain tax revenue would be at risk.
The DAP adviser also urged the government to recycle tax gains back into the economy through targeted support, including subsidies, incentives and soft loans to help firms invest in productivity, innovation and digitalisation.
He further called for immediate measures to support MSMEs amid global economic pressures, including rising oil prices, supply chain disruptions and higher logistics costs.
Among his proposals were interest-free and collateral-free loans for small businesses, a temporary moratorium on loan repayments, easing regulatory burdens, and faster approval processes for hiring foreign workers.
Lim also suggested policies to strengthen local participation in the economy, including requirements for investors to source a portion of goods from domestic businesses.
He added that such steps would help restore confidence in the tax system by making it more transparent and equitable, while ensuring businesses remain viable contributors to national revenue.
Date: 28 April, 2026 3:00 pm
Source: Malay Mail
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