What Guan Eng should do about RM19.4b GST ‘robbery’

Opinion  |  P Gunasegaram
Published:  |  Modified:

QUESTION TIME | The first thing that Finance Minister Lim Guan Eng should do is to establish whether there was a robbery or not from payments of the goods and services tax or GST to the government. As I pointed out in this article, it is not a robbery if funds were merely moved from one government account into another. That’s plain common sense and cannot be disputed.

It only becomes a robbery if it was embezzled from one or both of the accounts. The two relevant accounts are the trust account into which GST refunds are made and the government’s consolidated revenue account into which revenue collected goes. Since Lim has access to this revenue account, he should be able to quickly say if any money from here has been transferred illegally and make the appropriate police reports.

No major investigation is needed to establish whether a robbery has taken place - all you need to do is to check and see if any money is missing, just as you check and see what is missing from your house after someone breaks in.

The second thing is more complicated and more subjective. Was proper procedure adhered too in paying out GST refunds? The GST Act unambiguously allows the refunds to be paid from the trust account. Customs director-general T Subromaniam said from April 2015 (when GST was imposed) until the end of May 2018, the amount of refunds claimed totalled RM82.9 billion but of that amount, only RM63.5 billion was paid out during that same period.

"The Customs Department had requested RM82.9 billion from the (government's) monthly trust fund for the purpose of GST refunds from April 1, 2015, to May 31 2018, but the full amount was not transferred (from the government's consolidated accounts) to the trust fund.

"As such, as of May 31, 2018, the trust fund still needs and is experiencing shortages to pay back RM19.4 billion in GST refund arrears," Subromaniam said, adding that the monthly trust fund meeting was chaired by the secretary-general of the Treasury.

This indicates that the procedure was for money to be transferred from the consolidated revenue account to the trust account as and when necessary. In fact, the then Treasury secretary-general said, “The Treasury allocates to the GST trust account monthly based on the amount required by the Customs Department and the financial position of the government.”

For better or worse, that was the procedure that was established by the government previously and if Lim wants to make improvements to that and implement a new system, by all means, and tell us how it works.

There have been many complaints about the GST refund system and delays in payment. But no one, including Lim and the Customs DG have explained why this is so. They should do so now. Does the government not have enough money to pay GST...

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