PUTRAJAYA, July 16 — The Finance Ministry respects the two main recommendations of the Public Accounts Committee (PAC) that the violation of the laws and non-compliance of regulations on the repayment of Goods and Services Tax (GST) should not recur.  

Finance Minister Lim Guan Eng in a statement today on the PAC report, said the report confirmed that there were several non-compliances in the repayment of GST by the previous government.

According to him, the GST Act had been violated as Attorney-General had informed PAC that the collected tax should be channeled into the GST refund consolidated fund to enable payment made in 14 working days.

The GST collection was instead channeled directly into a consolidated revenue account which according to the Attorney-General infringed the basic principle of trust and trust accounting requirement and it is not in line with the provisions of Section 54(2) and Section 54(5) of the GST Act 2014, he said.

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According to him, the PAC report concluded that the former government had used the GST collection for other purposes which subsequently led to a shortfall of RM19.25 billion.

According to him, the Accountant-General in the PAC report said RM19.4 billion which should be used to repay GST had been spent for management and development expenditure while the Customs Department admitted RM19.4 billion has yet to be repaid as there was insufficient fund in the GST repayment fund.

The GST repayment fund as at May 31, 2018 was only as RM150 million, he said.

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According to Lim, PAC has recommended two measures to ensure the government’s administration fully comply with the laws of the country especially in financial procedures for a more orderly and accountable financial administration system.

The PAC also recommended that government officers entrusted should advise the government administration on laws, procedures and statistics without fear or favour especially on cash flow planning and accountability in financial discipline. — Bernama