No money missing from GST refund, says Johari

All revenues must be credited into the consolidated fund under the Accountant General’s Dept

By AFIQ AZIZ / Pic By TMR

Former Second Finance Minister Datuk Seri Johari Abdul Ghani (picture) denied that there was any “missing money” from the Goods and Services Tax (GST) input tax refund as alleged by Finance Minister Lim Guan Eng.

At the tabling of the second reading of the GST (Repeal) Bill 2018 on Wednesday, Lim stated that about RM18 billion or 93% of the RM19.4 billion input tax credit under the GST system since 2015 had gone missing.

“There is no money missing. It is just that the present government doesn’t know how things work, (including) how the refund claims work,” Johari said in a message reply to a query by The Malaysian Reserve (TMR) yesterday.

He also commended former Cabinet Minister Khairy Jamaluddin’s move in lodging a police report yesterday over the allegedly missing RM18 billion GST refund money that was accumulated during the administration of the Barisan Nasional (BN)-led government. Khairy had also urged for an open probe over the accusation, and to not just rely on the internal inquiry by the Ministry of Finance (MOF).

“It is good that Khairy lodged a police report so that we can prove that no money is missing,” Johari said.

However, Johari did not comment on why the amount was not refunded to the applicants for more than two years — since GST’s inception in April 2015.

During the Parliament session last Wednesday, Lim said the refundable input tax was channelled to the Federal Consolidated Fund which could have allowed the previous government to spend the money for its “own purposes”.

Lim said while unpaid refunds from the consumption tax had reached RM19.4 billion, his ministry found more than 90% of the input tax refund was not on the balance sheet.

Based on the GST Regulations 2014, input tax credit refunds should be made within 14 working days for online submission, while manual filings will take about 28 working days.

Meanwhile, former Treasury secretary general Tan Sri Dr Mohd Irwan Serigar Abdullah said all revenues, including from the Royal Malaysian Customs Department and the Inland Revenue Board, must be credited into the consolidated fund as stipulated under the Financial Procedure Act 1957.

He said the fund is administered by the Accountant General’s Department.

“When it is needed (including for input tax credit under GST), (only) then it will be taken out (from the consolidated fund),” he said.

Under the GST regime, businesses are allowed to claim the input tax credit for taxes paid on purchases from Customs upon proper documents submission. Mohd Irwan said the Treasury would then allocate the requested amount to the department input tax credit under GST.

He said it also depends on the government’s financial ability at the present time.

Mohd Irwan added that any outstanding amount would be due to verification, investigation and auditing processes.

“Outstanding payment is learned to be at RM15 billion for 2017 that will require verification, investigations and auditing processes,” he said.

In support of his colleagues from the previous regime, former International Trade and Industry Minister Datuk Seri Mustapa Mohamed has urged the government to conduct an immediate internal inquiry and produce the outcome within a week.

“The outcome must be shared to the public and it should also be referred to the Public Accounts Committee,” Mustapa said on his official social media platform yesterday.

“This issue is not only affecting BN’s image, but also all civil servants working at the MoF and Customs,” he added.

Customs DG Datuk Seri Subromaniam Tholasy had stayed mum over TMR’s query on the matter at press time.