RM19.4b meant for GST refunds used for other purposes, claim sources

An investigation by the Public Accounts Committee (PAC) revealed that the previous administration did not "rob" the RM19.4 billion meant for GST refunds but used it for government expenditure instead, according to sources.

The sources told Malaysiakini that the PAC report, which is to be tabled in Parliament next week, had used the term "tiada kehilangan" (did not go missing) for the GST funds and states that the funds were used for expenditure purposes.

They also revealed that the account meant for GST refunds was not adequately funded.

This, according to the sources, was possibly in breach of Section 54 of the Goods and Services Tax Act 2014. Although this law has been abolished, it could be retrospectively applied.

The PAC is also believed to have heard from the attorney-general that this matter was open to investigations by the police.

Previously, Finance Minister Lim Guan Eng had told Parliament that the RM19.4 billion had been robbed (rompak).

These sources were approached by Malaysiakini following the publication of a report by The Malaysian Insight (TMI), which suggested that the previous administration had "dipped" into the account meant for GST refunds.

This interpretation, said sources, was not accurate.

In a statement issued at noon today, PAC chairperson Noraini Ahmad (photo) had also criticised the TMI article for being inaccurate and confusing.

Noraini also accused the press of disrespecting the PAC report, which was to remain confidential until it is released. She also urged reporters to wait for the release of the report before writing about it.

Last August, Lim dropped a bombshell in the Dewan Rakyat when he accused the previous BN government of "robbing" and stealing money meant for GST refunds.

This later prompted the investigation by the PAC and the brought the current government to request for RM30 billion in special dividends from Petronas to be used for GST refunds.

A source close to the Finance Ministry told Malaysiakini that what Lim told Parliament was that the money was diverted for other purposes due to a shortfall.

"That's 'rompak' because the government has no rights over the cash, which according to the law, has to be placed in a trust for refunds," said the source.

Former finance minister Najib Abdul Razak has denied the "robbery" allegation and explained that the money meant for GST refunds were in the consolidated revenue account and remittance to the refund account would take place on a monthly basis.

Section 54(1) and (2) of the GST Act said a fund known as the "Fund for Goods and Services Tax Refund" must be established and an a certain amount of GST collected, decided by the minister, must be deposited in this fund.

However, Section 54(5) of the GST Act states as follows: "Notwithstanding subsection (2) and the provisions of the Financial Procedure Act 1957, the Minister may authorise the payment into the Consolidated Revenue Account in the Federal Consolidated Fund of all or part of the moneys of the Fund."

The PAC had previously expected to wrap up its investigation by the end of 2018 and table its report in the March parliamentary sitting.

However, by March the committee was still in the midst of verifying documents with the National Audit Department and it also called up former Customs and Excise Department director-general T Subromaniam.

Citing sources, The Malaysian Insight said the delays were partly caused by disagreements among some PAC members about the recommendations that should be made.

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