The Auditor-General’s 2019 Report said the delay in making the refunds has caused LHDN to bear late payment charges of RM38.29mil for 135,960 cases from 2013 to 2019.
A late payment compensation of 2% per day will be charged 90 days after the submission of the tax returns via e-filing and 120 days after manual submissions.
The A-G said on Jan 1, 2019, the tax refunds amounted to RM18.436bil.
The report added that in 2019, the Federal Government had set aside RM18bil for tax refunds and as of Dec 31, 2019, LHDN was to refund a total of RM10.851bil to 1.26 million taxpayers.
Of that amount, RM3.807bil or 35.1% involved tax refunds for the years 2017 and prior, while RM7.044bil or 64.9% was for 2018 and 2019.
In its response, LHDN said the refunds for 2017 and the years before took a long time to settle because of several issues.
These included several cases that were still being audited or investigated, and refunds could only be done once the audits were concluded.
LHDN also said that several taxpayers had not updated their details for the refund process.
The A-G’s Report also said the Customs Department overpaid 75 Good and Services Tax (GST) refund claims by RM4.38mil despite receiving the applications past the due date of Dec 31, 2018.
It said the department received 100,736 GST refund claims which were audited from Feb 25 to April 30 this year.
“The audit found that this happened because the officers responsible did not check the date of receipt of the GST-03 statement,” said the A-G.
In response, the Customs Department said it was taking action to recover the money with almost RM800,000 involving 42 transactions concluded as of Aug 3.
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