GST refund funds RM18 billion “robbed” by BN Government says Finance Minister

(10-8-2018)

Finance Minister Lim Guan Eng today defended his statement that RM18 billion meant for the Goods and Services Tax (GST) refunds to traders had been “robbed” by the previous Barisan Nasional (BN) government. He did not yield even when several opposition Barisan Nasional (BN) MPs demanded that he withdraw the word “robbed” considering that no investigation had been conducted as yet.

These MPs included Tan Sri Noh Omar (Tanjong Karang); Datuk Seri Hamzah Zainudin (Larut), Khairy Jamaluddin (Rembau) and Datuk Seri Dr Wee Ka Siong (Ayer Hitam). Lim, while winding up debate on the Customs (Amendment) Bill 2018, said an internal investigation would be conducted after which it would be recommended to Prime Minister Tun Dr Mahathir Mohamad to have an open investigation led by an independent and experienced outsider. He said Treasury secretary-general Datuk Seri Dr Ismail Bakar had been appointed to head the internal probe. “This is (being done) so that the people can know the truth about this case,” he told the Dewan Rakyat. Lim had told the House yesterday that there was only RM1.49 billion remaining in the GST refund trust fund when there should be RM19.4 billion for the period April 2015 to May 31 this year, thus showing a shortfall of RM18 billion.

Speaking to reporters at the Parliament lobby, Lim said former Treasury secretary-general Tan Sri Dr Mohd Irwan Serigar Abdullah would be asked to explain the alleged missing GST refund money. “If it (money) is there (in the Consolidated Fund), we would have paid back (the input tax) now but it is not there. So, if (Mohd) Irwan (Serigar) said it’s there, we want him to tell us where it is hidden. “Perhaps he knows something that all of us don’t know,” he said. Lim was responding to Mohd Irwan Serigar’s statement today denying the allegation of the missing money. The former Treasury secretary-general explained that all the GST proceeds were placed in the Consolidated Fund before being channelled to the trust fund to repay GST claims based on the request of the Royal Customs Department. Meanwhile, the Dewan Rakyat passed the Customs (Amendment) Bill 2018 pertaining to the implementation of the new tax system, the Sales and Service Tax (SST).

The House also approved the Free Zones (Amendment) Bill 2018 after the MPs showed no interest in debating the bill. Yesterday, the Dewan Rakyat passed the Goods and Services Tax (Repeal) Bill 2018 to abolish the GST. On Tuesday, it approved the Sales Tax Bill 2018 for the reintroduction of the SST. On Monday (7 Aug), an emotionally-charged Lim Guan Eng revealed that refunds for the Goods and Services Tax (GST) were delayed as the money was “robbed” and spent first by the previous Barisan Nasional Government. Lim, who is the Finance Minister, revealed in Parliament on Monday (Aug 7) that some GST input tax refunds took up to two years as there was no money in the Government trust fund (akaun amanah). “There was no money in the Government trust fund, the money instead went into the consolidated fund and was considered as revenue. That money (refund fund) was spent by the Government,” said the Finance Minister.

Khairy, who is Rembau MP, said the Pakatan Harapan Government should look into improving the claims mechanism for the GST, instead of implementing the SST. Khairy said he had previously questioned the former Barisan’s second Finance Minister on the reason why the input refund claims were delayed. “I was told that one of the reasons was because even the Customs Department had disputed some of the claims that were sent, which is why the input tax claims were refunded late,” said Khairy who was the former Youth and Sports Minister. To this, Lim asked if that was the sole explanation Khairy was given for the delay. “I am very surprised…This is a serious matter. The reason why the monies were not refunded was because it went into the consolidated fund. Do you realise this?” asked Lim.

Khairy then said Lim should not merely throw such allegations but come up with proof. To this, Lim said he will provide the proof on Wednesday (Aug 8). “I will prove it to everyone when I table the Bill to repeal GST. You should know the accounts, as a former Minister. “If you had read them, you would know. As a minister you have the responsibility to look at the accounts and you have failed. “The GST refund funds were robbed by the previous Barisan Government,” said an emotional Lim.

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