COMMENT | The RM16 billion that has yet to be returned spanning back six years has remained missing from the Tax Refund Fund (TBBC), regardless of whether the modified cash basis or the accrual system is used.
The former finance minister Najib Abdul Razak continues to make false allegations that the RM16 billion taxes which was unreturned six years ago is not missing, as the accounting standard that is supposed to be used is based on modified cash accounting and not the accruals accounting standard.
This statement by Najib – which blames the accounting system used in an attempt to portray that the RM16 billion in unreturned taxes is not missing – is without basis and is absolutely untrue.
The RM16 billion remains missing from the TBBC regardless of whether the modified cash basis or the accrual accounting standard is used by the government.
According to the Inland Revenue Board (IRB), and as verified by the National Audit Department, the modified cash basis as mentioned Najib was used. It is found that the credit balance which has yet to be returned to taxpayers stands at RM16.046 billion as of 31st May 2018, as shown below.
The RM16 billion was owed to a total of 1.65 million individuals and companies, and has yet to be returned to these taxpayers after six years.
The seriousness of this situation was stated in an official letter by the IRB director to Treasury secretary-general Mohd Irwan Serigar Abdullah in 2016, wherein the board requested for the transfer of extra funds from the Consolidated Funds to the TBBC. However, this was ignored by Irwan.
The accrual amounting to RM16 billion was due to the failure of the Finance Ministry's cash management committee at the time to execute the transfer of extra funds to the TBBC, as was requested by the IRB during the monthly meeting, which was chaired by the former Treasury secretary-general.
The TBBC is a trust account formed pursuant to Section 111B of the Income Tax Act 1967 for the purpose of channelling funds from the Consolidated Fund, and is for the purpose of returning taxes to the taxpayers.
It should be emphasised that pursuant to Section 111B(2) of the Income Tax Act 1967, only the Finance Minister has the power to make any decisions pertaining to the funds to be transferred from the Consolidated Funds to the TBBC.
Therefore, Najib has to answer the question on why he allowed for the RM16 billion unreturned taxes not to be returned to the respective 1.65 million taxpayers in accordance to the timeframe set under the law.
It is not only the police officers investigating this matter under Section 409 of the Penal Code that would be interested to know this, but also the public, as this concerns the public interest.
LIM GUAN ENG is the finance minister.
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