Outstanding GST refund to be paid by year-end

pic by TMR FILE

THE government has an outstanding of RM4.76 billion in Goods and Services Tax (GST) refund which will be paid off by year-end, Deputy Minister of Finance II Mohd Shahar Abdullah said.

On top of the RM19.4 billion GST refunds that had been claimed and processed previously, he said there was an additional RM9 billion claimed by businesses.

“A total of RM1.48 billion had been refunded between June 22 and July 8. The outstanding balance of GST refund claims are RM4.76 billion,” he told the Dewan Rakyat yesterday.

Among the issues causing the late payment of GST refunds include invalid registrant bank details and lack of response in terms of feedback and documents.

Mohd Shahar was responding to questions by former Deputy Finance Minister Datuk Amiruddin Hamzah (Independent-Kubang Pasu) on the status of delayed GST refunds payment.

He highlighted that the Finance Ministry (MoF) and Customs Department are improving the processes of GST refunds payment, in line with recommendations by the Public Accounts Committee (PAC) in its GST refund report dated June 15, 2019.

In June, Finance Minister Tengku Datuk Seri Zafrul Tengku Abdul Aziz said Customs is currently using the “pay first, audit later” approach to expedite the payout of GST refunds to selected companies based on the GST (Repeal) Act 2018.

The initiative was in line with the economic recovery steps introduced under the short-term National Economic Recovery Plan to help small and medium enterprises that were adversely affected by the Movement Control Order.

Under Section 8 of the Act, the government is allowed a refund period of up to six years from September 2018.

Responding to a separate question by Datuk Seri Ahmad Maslan (Barisan Nasional [BN]-Pontian) on whether any action would be taken against former Finance Minister Lim Guan Eng over his claim that RM19.4 billion in GST refunds had been stolen, Mohd Shahar said the matter would be referred to the government agencies which previously issued statements on the issue.

“The PAC had said in July 2019 that the money was not stolen, instead it was used for the country’s development,” he noted.

Last year, PAC chairperson Datuk Dr Noraini Ahmad said the money was used to pay for the government’s management and development expenditure.

She said the previous BN government had channelled the money collected from GST into a consolidated revenue account, which was transferred in stages to the GST refund consolidated fund, as decided by the GST Refund Committee.

Mohd Shahar said the MoF would also improve the cashflow for the collection and disbursement of GST collections.

He added that the collection for the Sales And Services Tax was much less, at RM27.56 billion in 2019 compared to over RM40 billion for GST.

“The government would no longer hold the money, allowing companies the cashflow to run their businesses,” he said, responding to Amiruddin’s statement who said the lack of immediate GST refunds could cause cashflow problems for companies during the economic slowdown due to the Covid-19 crisis.