Contradicting Guan Eng, PAC concludes no GST refunds ‘robbed’

PAC chairman Datuk Noraini Ahmad said in a statement ahead of the parliamentary tabling of the investigation report that the shortfall was instead the result of a projection error. — Picture by Yusof Mat Isa
PAC chairman Datuk Noraini Ahmad said in a statement ahead of the parliamentary tabling of the investigation report that the shortfall was instead the result of a projection error. — Picture by Yusof Mat Isa

KUALA LUMPUR, July 15 — The Public Accounts Committee (PAC) that investigated Lim Guan Eng’s claim that the Barisan Nasional (BN) government “robbed” public coffers of billions in Goods and Services Tax (GST) refunds has found no such losses.

PAC chairman Datuk Noraini Ahmad said in a statement ahead of the parliamentary tabling of the investigation report that the shortfall was instead the result of a projection error.

In July last year, Finance Minister Lim alleged in Parliament that the BN administration “robbed” the country of an estimated RM19 billion meant for GST refunds.

“There was no loss of funds from GST revenue collections. The revenue not transferred to the GST refund pool was used to fund management and development expenses.

“The government previously overestimated the net GST collections by 65 per cent,” she said.

However, she said the PAC found that the previous government did not abide by the legal provisions to allocate the refund payments into the appropriate account.

Instead, it entered the funds into the Consolidated Account and only transferred these to the refund pool as and when needed.

“This is inconsistent with the provisions in Section 54(2) and 54(5) of the GST Act 2014,” she said.

The PAC also found that the previous government failed to transfer adequate funds to the GST refund pool and only returned 35 per cent of annual revenue when it should have set aside 42 per cent, she said.

Noraini further said the delay in transferring the funds to the GST refund pool was to prevent the government’s accounts from going into deficit.

The PAC is recommending that the government abide by its prescribed laws in its financial affairs.

It also advised all officers entrusted with the administration of federal financial matters to advise the government on all laws, procedures and accounting details without fear or favour.

The PAC investigated the matter over 11 months beginning from August 2018.

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