The Tourist Refund Scheme (TRS) for taxes collected under the goods and services tax (GST) has been privatised by the government, said PKR vice-president Mohd Rafizi Ramli.

He said the scheme is being run by a private company called Iris Corp Berhad, which then set up a joint-venture with Swiss-based company Global Blue.

“This joint venture has a five-year concession to operate the TRS. In return, the joint-venture will be paid a commission of 15 percent from the total of GST refunds paid to tourists,” Rafizi ( left ) told a press conference at PKR’s headquarters today.

He condemned the privatisation of the TRS, saying that it would it would cause uneasiness amongst the people.

“While the rakyat are burdened by the introduction of GST, some parties are reaping a profit from GST’s implementation through a policy of privatisation,” he said.

Queries customs department

Rafizi also questioned the role of the Customs and Excise Department, since it has to rely on a private company to operate the scheme.

“If it wasn’t privatised and managed by the customs department itself, the 15 percent commission would have remained as revenue to support government spending,” he said.

He also criticised the RM365 million spent by the government to promote GST, but failed to provide funding so that the customs department can operate the scheme.

He urged the government to review GST-related privatisations and slash the concession period given, so that GST collections do not “leak” to the concession holders.

Malaysiakini has contacted Iris Corp Berhad, which admitted that it has obtained a contract to operate the TRS.

However, the company declined to comment, saying that they wanted to read news reports on Rafizi’s comments first.

Meanwhile, Rafizi revealed that the Finance Ministry-owned company SRC International has recorded an impairment loss of RM89 million in its joint venture, based on its latest financial statement.

He had previously told reporters on April 1 that SRC itself had recorded RM115 million in impairment losses to date.

“That means for the financial year of 2014 alone, SRC’s impairment losses from its investments in coal mining in Mongolia has exceeded RM204 million,” said Rafizi, who is also a chartered accountant.

SRC was previously a 1Malaysia Development Berhad (1MDB) subsidiary before it was taken over as a wholly owned company of the Ministry of Finance.

Apart from its own investments, SRC had also partnered with a Mid-Eastern company to found the joint venture company Aabar to invest in mining assets.

RM4 billion loan

Since the funds used by SRC for its investment involve a RM4 billion loan from Retirement Fund Incorporated (KWAP), Rafizi said the issue has angered civil service retirees.

This is especially true for retirees from statutory bodies who have been denied their pensions when the body was privatised, he said.

“They are comprised of civil servants who had joined the civil service but then absorbed into statutory bodies like Bank Simpanan Nasional and the Employees Provident Fund (EPF).

“There are thousands of retirees amongst them who have been denied pensions, while the pension fund is invested by SRC into previously unknown investments,” Rafizi said.

He added that he would help the retirees to negotiate with the government to claim a portion of the pension.

The problem, he said, could not be resolved in court because the retirees had signed an agreement during the privatisation exercised.

However, he said he would discuss this with lawyers and help several retirees to sue SRC and prevent the company from making further bad investments.