Routing GST funds into different account a breach of law, says AG
PAC REPORT | Chanelling GST revenue directly into the federal government's consolidated revenue account was wrong, according to Attorney-General Tommy Thomas.
In his correspondence to the Public Accounts Committee (PAC) last October, Thomas said this contravened Section 7 of the Financial Procedure Act 1957 and Section 54 of the Goods and Services Act 2014...
PAC REPORT | Chanelling GST revenue directly into the federal government's consolidated revenue account was wrong, according to Attorney-General Tommy Thomas.
In his correspondence to the Public Accounts Committee (PAC) last October, Thomas said this contravened Section 7 of the Financial Procedure Act 1957 and Section 54 of the GST Act 2014.
He said this was a breach of fundamental trust law principles and trust accounting requirements. He also opined that doing so was a radical departure from Parliament's intentions.
"The GST regime is based on the fundamental precept that taxpayers will receive a refund for the amount of GST they pay in the course of producing taxable supplies.
"Parliament's intention is that taxpayers receive this refund. The statutory entitlement to a refund and the creation of the GST Trust Fund are evidence of that intention.
"By failing to ensure that taxpayers received their refunds, the former government failed to give effect to Parliament's intention," he added.
Legal risks
To remedy this, Thomas advised the government to pay the beneficiary taxpayers, including interest, because the government profited from the improper use of GST monies.
The attorney-general's letter, however, does not address the subject of criminal liability, but stressed that it must be "further considered."
"Apparently, they are the subject matter of criminal investigations by the police," said Thomas.
Thomas also warned that the government must proactively reach a settlement with beneficiary taxpayers to avoid legal problems.
"Importantly, where a trustee mixes trust money with his own, the beneficiary has a charge on the whole mass of monies. i.e. the entire consolidated revenue account," he said.
Thomas' reply was appended to the PAC's report on the delayed RM19.4 billion in GST refunds released today.
The PAC concluded that while "no money was missing", the GST Trust Fund was insufficiently funded because it was used for other purposes.
The committee also concluded that the previous administration violated Section 54 of the GST Act for paying GST monies into the consolidated revenue account.
RELATED REPORTS
Najib insists GST refunds done by the book, PAC can't find proof
Irwan: Gov't needs prioritised over legitimate GST refund claims
PAC report: GST revenue went to wrong account but 'no money lost'
GST refunds 'robbed': Opposition refers Guan Eng to rights committee
Are you sure you want to delete this comment?
This action cannot be undone.