RM18b input tax credit under GST system robbed by BN administration: Lim Guan Eng

Finance Minister Lim Guan Eng told reporters a former Treasury secretary-general may have been responsible for the missing amount.
Finance Minister Lim Guan Eng told reporters a former Treasury secretary-general may have been responsible for the missing amount. PHOTO: BLOOMBERG

KUALA LUMPUR (THE STAR/ASIA NEWS NETWORK) - Some RM18 billion (S$6 billion) or 93 per cent of the RM19.4 billion input tax credit under the Goods and Services Tax (GST) system since 2015 had been misappropriated by the previous administration, claimed Finance Minister Lim Guan Eng.

"I was very shocked when informed that this happened because the previous government had failed to enter the GST collection in the trust account specifically meant for repaying GST claims.

"Instead, the Barisan Nasional government pilfered the trust account and entered cash GST collection directly into the consolidated fund as revenues to be spent freely," he said when tabling the Goods and Services Tax (Repeal) Bill 2018 during its second reading in Parliament on Wednesday (Aug 8).

He said that as of May 31 this year, the outstanding GST refund stood at RM19.397 billion, while there was only a balance of RM1.486 billion in the repayment fund.

Under the GST, the input tax credit allowed businesses to re-claim credit for taxes paid on purchases subject to the filling of input tax documents.

Mr Lim expressed his disappointment that the present government was blamed for the delay in reimbursing the RM18 billion input tax when the money should have been returned over the last three years.

Speaking to reporters later at the Parliament lobby, Mr Lim said a former Treasury secretary-general may have been responsible for the missing amount.

"I would assume the previous KSB (ketua setiausaha perbendaharaan / Treasury secretary-general) would have known about this. Definitely it must have his approval.

"The money was not returned to the trust account. Only the highest can authorise that, why didn't you put it in the trust account? The trust account is a very important account, by not doing so, that is wrongdoing already.

"For us, (investigations) internally, we want something definite because we want to look at the circle of decision makers.

"Definitely the previous KSB is in the know, as well as others, and we want to at least identify them and then ask the Prime Minister and Cabinet to decide how to proceed." 

Datuk Seri Dr Wee Ka Siong (BN-Ayer Hitam) agreed that action should be taken by the appropriate agencies if the monies from the input tax were wrongly channelled.

"We should not protect any individuals but if the money is entered into the Consolidated Fund, it is still the government's money.

"We need to return the money as it has to be paid as input tax," said Dr Wee.

Mr Lim had on Tuesday (Aug 7) first revealed in Parliament that the refunds for the GST were delayed as the money was "robbed" and spent first by the previous government.

He claimed that some GST input tax refunds took up to two years as there was no money in the government trust fund (akaun amanah). Instead, the money had gone into the consolidated fund and was considered as revenue.