The finance minister had been following the advice of the Customs Department when he approved the goods and services tax (GST) relief for Chinese firm China Communications Construction Company (CCCC) in regard to the East Coast Rail Link (ECRL).

This was confirmed by Customs director-general Subromaniam Tholasy during a press conference today.

The finance minister in question is also caretaker prime minister Najib Abdul Razak.

“(He did so) on our recommendation, after considering the pros and cons, whether or not it is beneficial to the government and to the people of Malaysia. We don’t simply recommend exemptions or relief without any basis.

“...It is his power, it is in the finance minister’s power to sign off (on the GST relief).

“But the finance minister will usually act upon the advice of the implementing agency as well as the policymakers at the Ministry of Finance,” he said at the Customs headquarters in Putrajaya today.

Subromaniam also reiterated that the decision had been made in the interest of Malaysians, contrary to news claiming otherwise.

“I want to stress that people should not spread ‘fake news’ about this tax exemption given to the ECRL (construction) company.

“We have to remember that the rakyat are the ones who will benefit from this, not a company from China. That’s why we need to understand the mechanism of GST.

“However, when I look at social media, I am unsure if people understand the issue of tax or if they are trying to confuse the rakyat on purpose.

“(Because if we don’t grant GST relief) then the cost of the project will increase, the government will need to borrow more money and this will add to the country’s debts.

“Is this what these irresponsible people want?” he asked.

Subromaniam held today’s press conference to “clear the air” over the confusion which had arisen over the present administration's move to grant CCCC relief from paying GST.

The matter was first revealed to the public by Amanah vice-president Husam Musa on Tuesday, when he uploaded documents pertaining to it online, including a certificate of GST relief on which it was stated it was within the finance minister's powers to do so.

Various parties have since cried foul over the move, with some expressing concern that smacks of preferential treatment.

Other parties, meanwhile, have come to the Putrajaya's defence, stating that the GST relief was beneficial to the public.