Oh no! Another one! The hole left by previous government is apparently deeper than previously thought! BN government misappropriated RM16 billion in tax refunds: Guan Eng
KUALA LUMPUR: Finance Minister Lim Guan Eng has exposed another case of misappropriation and misuse of taxpayersâ€™ money by the Barisan Nasional (BN) administration.This post has been edited by kmarc: Aug 22 2018, 08:54 PM
In his latest expose, Lim said the previous government had failed refund the excess income tax and real property gains tax paid by taxpayers totalling RM16.046 billion as of 31 May 2018.
The RM16.046 billion of outstanding tax refunds not returned by the Inland Revenue Board of Malaysia (IRB) involves 1,653,786 cases of companies, individuals, societies and foundations.
He said the cases date back to more than six years ago.
Lim said the arrears in tax refunds was due to the Cash Management Committee in the Finance Ministry not allocating enough money to the Tax Refunds Trust Fund (TRTF) as requested by the IRB.
â€śAs 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,â€ť he said, while pointing out that the cash management committee - which meets every month - was chaired by the former Treasury Secretary-General Tan Sri Dr Mohd Irwan Serigar.
Lim said the huge amount of outstanding tax refunds was due to the shortage of transfers from the direct tax revenue collected to the TRTF.
He pointed out that tax refunds can only be made using the balance in the TRTF.
â€śAs of 31 May 2018, the balance in the TRTF is only RM1.486 billion based on the records from the Accountant Generalâ€™s Department, which is far lower compared to the RM16.046 billion required for the refunds that need to be made.
â€śIn other words, there exists a shortfall of RM14.56 billion as of 31 May 2018 which resulted in 1,653,786 taxpayers not receiving their tax refunds as far back as more than 6 years ago,â€ť he said.
Lim said it was clear that the RM14.56 billion not transferred from the Consolidated Funds to the TRTF had already been recognised as government revenue by the previous government.
â€śThis means that the Federal Government revenue that was reported by the previous government is not accurate and larger than what it actually was,â€ť he said.
Lim said to relieve the taxpayersâ€™ burden, the government has agreed to allow taxpayers who have outstanding tax refunds from IRB to make an application to set-off the amount against the tax payable for the current year.
He said the set-off application needs to be submitted to IRB to be verified and considered for approval.
â€śBesides that, the remaining tax refunds will be carried out based on the ability of the government depending on its fiscal position.
â€śWe hope that the failure to return RM16.046 billion of tax refunds is the last mega exposĂ© related to the misappropriation and misuse of taxpayersâ€™ money by the previous government.
â€śThe new Pakatan Harapan government which upholds the principles of Competency, Accountability, and Transparency (CAT) will do its utmost best to resolve such scandals, including through returning the tax refunds,â€ť he said in a statement.
The breakdown of the outstanding tax refunds not returned by the IRB as of 31 May is as follows:
The government had previously revealed that the previous administration also failed to refund the Goods and Services Tax (GST) input tax amounting to RM19.397 billion as of 31 May.
Lim said the money was not refunded due to the BN governmentâ€™s failure to transfer sufficient amounts to the GST Refunds Trust Account.
â€śThis represents a breach of trust because the previous government had used the money belonging to the taxpayers without their permission as they deliberately concealed the expenditure deficit to fund its spending.
â€śGST refunds should have been made within 2 weeks as stipulated by the law but there are still arrears from 2015.
â€śThe misappropriation of taxpayersâ€™ money and falsification of accounts under the previous government, in which 121,429 individuals and companies have not received their RM19.4 billion GST refunds since 2015, is actually more serious than what was previously announced,â€ť he said.