The government should stop collecting the Goods and Services Tax (GST) until it can ensure that refunds to businesses are paid on time, said PKR vice-president Rafizi Ramli.

“It will only be fair for the rakyat to pay the GST on time when the authorities can pay the refunds on time,” the Pandan MP told reporters at the Parliament lobby today.

The Finance Ministry yesterday confirmed that only 41 percent of the GST refunds had been paid to the businesses.

Rafizi said this meant that 59 percent of the applications had been delayed and in turn, this affected the cash flow of businesses.

“When the cash flow gets affected, this will increase the costs and will result in rising prices of goods and services,” he added.

The PKR vice-president believes it is a big failure on the government’s part to not pay the refunds on time even though it has been six months since the taxation system was implemented.

“The victims are the traders and rakyat who get the late refunds.

"I cannot accept the excuse given by Deputy Finance Minister Chua Tee Yong ( photo ) that this is normal and has to be experienced in the early stages of the GST, when the rakyat had paid the GST on time on April 1, when it was implemented,” he said.

As such, it was only fair for the government to pay interest on top of its refunds to the businesses, he said.

“This is because businesses and the rakyat incurred additional costs due to cash flow problems that resulted from the government’s delay in paying the refunds,” he explained.