KUALA LUMPUR, July 16 — The Customs Department intentionally delayed the processing of the Goods and Services Tax (GST) refunds since the then-Barisan Nasional (BN) government did not have the revenue to pay it back.
This was revealed in the Public Accounts Committee (PAC) report released yesterday, when former Customs director-general Datuk Seri Subromaniam Tholasy was questioned during a hearing on March 7, and recorded into the Hansard.
He told the committee the department did not expedite the refunding process out of concern that its applicants would question why they did not yet receive their refund money.
“Businesses has been choking, some of them did not get their refund for two years, and this is very, very serious. We already have RM19.4 billion outstanding,” Subromaniam told the committee in a mixture of English and Malay.
He said the refund money should have been channelled into the fund but was not, and the lack thereof resulted in the department delaying its processing.
“I admit there was a delay. We did not want to hasten the process, for if we did and it was approved, the tax payer can see it in the system.
“Ours (the system) is very transparent. They can see it and go, ‘Hey, Customs has approved. Where is the money?’ Whereas there is no money,” Subromaniam said, standing by his earlier statement that the shortfall is RM19.4 billion.
He was cautioned by PAC member and Subang MP Wong Chen, who reminded Subromaniam that his statement was being recorded and that he was essentially implicating the entire department of not wilfully paying because the federal government did not have any money to do so, raising questions about the civil service integrity.
Subromaniam stood by his remarks, and recounted that when the GST was repealed on June 1 last year, claims were still coming in even nine months after that. On average the department is able to process up to four months’ worth of refunds claims when GST was being implemented.
“I do not have to hide anything. I think it is a known fact when the fund has no money, or is short on funds, we cannot (provide the refunds) (although) we have requested, we have requested funds,” he said, explaining that this meant there was nine months’ worth of claims by March which remain unprocessed.