More than S$5.3b in refunds owed to Malaysian taxpayers: Finance Minister Lim Guan Eng

PETALING JAYA (THE STAR/ASIA NEWS NETWORK) - Malaysia's Finance Ministry has dropped another bombshell, claiming that the previous Barisan Nasional (BN) government has not refunded a total of RM16.046 billion (S$5.3 billion) in 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 on Wednesday (Aug 22), Finance Minister Lim Guan Eng said the amount relates to over 1.65 million incidents covering companies, individuals, societies and foundations, as of May 31 this year.

According to Mr Lim, 29 per cent (RM4.6 billion) of the total amount has not been refunded to taxpayers for over six years.

Meanwhile, 38 per cent (RM6.125 billion) of the total amount has not been refunded for a period of between two and three years.

Backlogs stretching back four to five years make up 22 per cent of outstanding refunds, while those owed over the past one year make up 11 per cent.

The bulk of these outstanding refunds are meant to be paid to companies.

Mr Lim said that the outstanding tax refunds were 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 RM1.486 billion as of May 31, based on records from the Accountant General's Department, much lower than the RM16.046 billion required to refund taxpayers.

"In other words, there exists a shortfall of RM14.56 billion 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 RM14.56 billion, 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," Mr 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).

Mr Lim added that this committee was chaired by former Treasury secretary-general Mohd Irwan Serigar during the previous BN 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, Mr 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 Mr 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.

Mr Lim added that he hopes that this would be the last of his ministry's "mega exposés" of alleged misappropriation and misuse of taxpayer's money by the BN government.

Earlier in August Mr Lim had alleged that RM19.2 billion meant for goods and services tax (GST) refunds were missing from government coffers.