Finance Minister to propose open inquiry into 'missing' RM18b for GST refunds

August 12, 2018 | By | Reply More

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PETALING JAYA: In an intensifying he-said-she-said situation, Finance Minister Lim Guan Eng said he will propose an open inquiry headed by independent professionals into RM18 billion in goods and services tax (GST) refunds owing to businesses, after former prime minister and finance minister Datuk Seri Najib Abdul Razak stated that the money could have been spent by the new government.

The proposal will be put forward to Prime Minister Tun Mahathir Mohamad and the Cabinet once Treasury Secretary-General Datuk Seri Ismail Bakar completes an internal inquiry into the matter.

“The Ministry of Finance will also cooperate with any authorities investigating this matter,” Lim said in a statement issued on Saturday.

Najib’s statement came after Royal Malaysian Customs Director-General Datuk Seri Subromaniam Tholasy said last Friday that only RM63.5 billion of the RM82.9 billion claims made by taxpayers over the period from April 1, 2015 to May 31, 2018 had been deposited into the GST Refund Trust Account, set up for refund purposes, from the Consolidated Revenue Account despite requests made by Customs for the funds at monthly trust account meetings.

He reiterated that the fund is short of the RM19.4 billion, it needs to make refunds for claims made.

According to Lim, the RM19.4 billion owing consists of RM9.2 billion claimed from 2016, RM6.8 billion from 2017, RM2.8 billion from 2016 and RM600 million from 2015.

According to him, provisions under the Financial Procedure Act 1957 allow only the Finance Minister to authorise the payment of all or part of the monies of the fund into the Consolidated Revenue Account in the Federal Consolidated Fund.

“Did Najib give authority to Tan Sri Dr Mohd Irwan Serigar Abdullah not to transfer RM18 billion into the GST Refunds trust account? Like his former boss, the former Treasury secretary-general has also not been completely truthful with the facts when he claimed that all GST payments are made into the Consolidated Revenue Account, but did not explain why he refused to transfer RM18 billion into the GST Refund Trust Account,” he said in the statement.

Separately, the Federation of Malaysian Manufacturers (FMM) urged the government to review and close cases related to the refunds before the new sales and services tax (SST) comes on board on Sept 1. According to the body, 100 companies FMM surveyed in July said the outstanding amount of refunds they were yet to receive stood at over RM220 million.

Considering its member base of over 3,00 companies, the amount of refunds overdue could be bigger, FMM said in a statement on Friday.

FMM said delays in refunds have caused serious cash flow issues to its members, especially among small and medium enterprises, while also continuing to hurt exporters.

“While we appreciate the Minister of Finance’s candid and transparent announcement that the government owes businesses RM19.4 billion in GST refunds, FMM hopes for the approved refunds to be channelled back to members soonest possible.

“We would also like to urge the government to ensure that all pending cases on special sales tax refunds dating back to the GST era since 2015 are reviewed and closed before the SST 2.0 is implemented. We urge the Ministry of Finance to have a dialogue with stakeholders affected by the outstanding GST-related refunds to determine practical solutions to resolve this critical issue.

“We also require the government’s assurance that there will be no offset of GST credit for future SST payments,” it added.

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