After PAC finds GST funds diverted, Najib insists had right to do so

Former prime minister Datuk Seri Najib Razak is pictured at the Kuala Lumpur High Court July 15, 2019. — Picture by Firdaus Latif
Former prime minister Datuk Seri Najib Razak is pictured at the Kuala Lumpur High Court July 15, 2019. — Picture by Firdaus Latif

KUALA LUMPUR, July 15 — Former prime minister Datuk Seri Najib Razak conceded today that money meant for tax refunds should have been put into a trust account but insisted he had the power to divert these elsewhere.

Amid growing calls for him to be investigated for recording collections meant for Goods and Services Tax (GST) refunds as revenue in the Consolidated Account, the former finance minister insisted that the GST Act provided for this.

“Yes, it is true Clause 54 (2) of the GST Act requires that all GST collections be entered into the GST refunds trust.

“But Clause 54 (5) of the GST Act also empowers the finance minister (which was I at the time) to order that the collections be recorded into any other account,” he wrote on Facebook.

The Act has been repealed by the Pakatan Harapan government that reintroduced the Sales and Services Tax after winning the general election last year.

Najib also insisted that the practice of entering GST revenue into the Consolidated Account was consistent with other nations that collect a consumption tax including Singapore.

He further argued that refunds took a very long time to verify and insisted that the Customs Department did not ask his administration to increase the amount set aside for GST refunds.

The PAC investigation into Lim Guan Eng’s claim that BN “robbed” the country of RM19.4 billion in GST tax refunds did not come to the same conclusion as the finance minister.

However, it did conclude that money meant for the GST refunds was unlawfully diverted into the Consolidated Account and that the Najib administration did not provide enough funds to make the needed refund payments.