PAC: No GST money went missing

  • Nation
  • Tuesday, 16 Jul 2019

Kuala Lumpur: No money went missing from the Goods and Services Tax (GST) re­funds, says the Public Accounts Committee (PAC).

The funds were used for operational and development expenditures, said PAC chairman Datuk Dr Noraini Ahmad (pic).

She said the previous government had kept all the GST collection in the Consolidated Fund account and had transferred it in stages as and when it was needed and decided by the GST refund committee.

However, this was not in line with Section 54 (2) and Section 54 (5) of the GST Act 2014, said Noraini in a statement yesterday.

She said that Section 54 (2) of the GST Act and the trust deed on GST refunds (surat ikatan amanah kumpulan wang bagi pembayaran balik GST) dated March 13, 2015, had stipulated that all GST collection must be credited into the GST refund account.

Other regulations included setting between 14 and 28 working days after receiving the GST statement for the refunds to be processed, as required by law.

There had been a controversy over the GST refunds when Finance Minister Lim Guan Eng said in August last year that the RM19.4bil GST refunds were “robbed” by the previous Barisan Nasional administration.

Lim told the Dewan Rakyat that the former Barisan government had not been able to refund companies their credit tax from GST because 93% of the money had not been placed in the correct account.

Following the revelations made by Lim, the PAC began proceedings by calling relevant stakeholders, including officials from the Treasury, Customs Department, and former and current officials of the Finance Ministry.

Treasury secretary-general Datuk Ahmad Badri Mohd Zahir, in his testimony before the PAC on Oct 16 last year, when pressed to give his views, said that RM19.4bil was not stolen.

“My personal opinion, I don’t think it is stolen. It is there. The money is there.

“The procedure ... how the process (is) being done. The money is there. No way in this current juncture that the money will be suddenly ...whatever you call it, dicuri (stolen), misused or whatever it is,” he said.

Yesterday, Noraini said the previous administration’s practice to transfer 35% of the GST revenue collected annually from the Con­so­lidated Fund account to the GST refund account, as and when needed, was insufficient to cover the requests for GST refunds.

“Based on the testimonies during PAC proceedings, the PAC finds that the rate should be set at 42% at least,” she said.

She maintained that “no money from the GST revenue collection was lost”.

“The GST revenue that was not transferred into the GST refund account was used for operational and development expenditure.

“The previous government had also estimated its GST nett collection by 65% more than the actual collection,” said Noraini.

The PAC also found that the previous administration had delayed the transfer of funds from the Consolidated Fund account into the GST refund account to manage the country’s cash flow position to ensure the nation was not in a deficit management.

Noraini said the PAC had recommended that the government comply with the law, especially in financial guidelines (tatacara), to ensure the financial administration system was better managed and accountable.

“Civil servants who are entrusted with the job should also advise the administration on the laws and procedures without fear or favour, especially in cash flow planning and disciplined financial fiscal that is accountable,” said Noraini.

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