LETTER | Our finance minister recently made an allegation that BN "stole" the GST refund money. As with most of his statements, Lim Guan Eng is again taking advantage of the people's lack of knowledge of how government finances work in order to make a completely false political attack.
Lim's main reason why he said BN "stole" GST refund money is that all GST money was paid to the government consolidate funds and not in the GST refunds trust account.
The GST bill, which later became the GST Act, was tabled in Parliament where Lim was also present. The Act clearly explains how GST collections are treated.
As with any tax revenue of any kind, GST collections are paid to the government's consolidated funds. Based on the advice of the Customs Department, a budgeted amount for GST refunds are then allocated to a trust account.
This is the same mechanism used by other countries which have implemented a GST system including Singapore. Singapore's GST act Section II Administration, clause 5 states:
"5.—(1) The Comptroller shall be responsible generally for the carrying out of the provisions of this Act and for the collection of tax and shall pay all amounts collected in respect thereof into the Consolidated Fund."
The Singapore government also puts their GST collections in their consolidated fund exactly like what Malaysia's government does. Does it also mean Singapore's PAP also "stole" GST refund money?
For Lim's statement that "BN stole the GST refunds money" would mean that no company out of the hundreds of thousands in Malaysia would have received their GST refund.
Would it make sense that after 3 years, not a single one of these hundreds of thousands of company has come out in public that BN "stole" their GST refund and they have never gotten back their refund money?
Yes, there were instances where the government was late in paying GST refunds especially when the GST system was first implemented. But such delays were slowly improved as people got familiar with how the GST system works.
Most delays are mostly due to incomplete documentation from those applying for the refund. In most cases anyway, refunds are also "netted off" or "offset" against the GST payable by the companies too.
Be careful of what our finance minister says. All his statements are not 100 percent reliable or the truth as his main skill-set is to throw accusations and play political games.
Recently, he and his assistant Tony Pua were publicly called malicious liars in a world-side statement by a China state-owned company, which is part of the 4th largest company in the world, when Lim implied that this company, along with the EXIM bank of China had colluded with the BN government to engage in theft and money laundering over two pipeline projects.
Until now, Lim and Pua have dared not rebut or comment on this China state-owned company's calling them malicious liars.
A former government servant familiar with the GST system
The views expressed here are those of the author/contributor and do not necessarily represent the views of Malaysiakini.