PETALING JAYA: The Finance Ministry has dropped another bombshell, claiming that the previous Barisan Nasional government hasn’t refunded a total of RM16.046bil of excess income tax and real property gains tax to taxpayers – with some being owed these refunds for the last six years.
In a statement issued Wednesday (Aug 22), Finance Minister Lim Guan Eng said the total amount involves 1,653,786 incidents consisting of companies, individuals, societies and foundations, as of May 31 this year.
According to Lim, 29 percent (RM4.6bil) of total amount, which consists of RM3.09bil of tax refunds for companies and RM1.503bil for individuals, societies and foundations, has not been refunded to taxpayers for over six years.
Also, 38 percent (RM6.125bil) of the total amount, consisting of RM5.212bil for companies and RM910mil for individuals, societies and foundations, hasn’t been refunded for a period of between two and three years.
And 22 percent (RM3.539bil) of the figure, consisting of RM2.759bil for companies and RM780mil for individuals, societies and foundations, comes from a backlog stretching back four to five years.
Finally, 11 percent (RM1.789bil) of the total amount, made up of RM1.356bil for companies and RM433mil for individuals, societies and foundations, have not been refunded to taxpayers over the past one year.
Lim said that amount of outstanding tax refunds was due to a shortage of transfers from the direct tax revenue collected in the Tax Refunds Trust Fund (TRTF).
He added that the balance in the TRTF stands at RM1.486bil as of May 31 based on records from the Accountant General’s Department, much lower than the RM16.046bil required to refund taxpayers.
“In other words, there exists a shortfall of RM14.56bil as of May 31, which resulted in 1,653,786 taxpayers not receiving their tax refunds as far back as more than six years ago.
“Therefore, it is clear that the RM14.56bil, which was not transferred from the Consolidated Funds to the TRTF, had already been recognised as government revenue by the previous government.
“This means that the government revenue that was reported by the previous government is not accurate and larger than what it actually was,” Lim said.
He alleged that the arrears in tax refunds of more than six years was because the Cash Management Committee under the Finance Ministry did not allocate enough funds to the TRTF as requested by the Inland Revenue Board (IRB).
Lim added that this committee was chaired by former Treasury secretary-general Tan Sri Dr Mohd Irwan Serigar during Barisan’s administration.
“As I have explained before, this amounts to the falsification of accounts and the misappropriation of tax refunds for other purposes or to conceal the actual deficit and present a surplus,” he claimed.
To address this issue, Lim said the Pakatan Harapan government was now allowing taxpayers who have outstanding tax refunds from the IRB to make an application to set off the amount against the tax payable for the current year.
According to Lim, this application must be submitted to the IRB for verification and consideration for approval.
“Besides that, the remaining tax refunds will be carried out based on the ability of the government depending on its fiscal position,” he said.
Lim added that he hopes that this would be the last of his ministry’s “mega exposés” in relation to alleged misappropriation and misuse of taxpayer’s money by the Barisan government.