Govt mulls tabling supplementary budget

SERDANG (August 13): The government is looking at tabling the supplementary budget this week, said Prime Minister Tun Dr Mahathir Mohamad.

“We will look at that,” said Dr Mahathir when asked by reporters if the government would be tabling the supplementary budget this week after visiting an art exhibition, Tun M: A Forever Legacy at the Perdana University here yesterday, Bernama reported. 

On the dispute between the previous government and Finance Minister Lim Guan Eng on the alleged missing RM18 billion from a fund for the goods and services tax (GST) refunds, Dr Mahathir said: “So if it (the RM18 billion) is not missing, show us where the money is.”

Asked if the Pakatan Harapan government had used the money to pay any of the expenditure since it came into power on May 10, the prime minister said: “Well, we are short of money. That is a fact.”

Dr Mahathir said Pakatan was short of money because a lot of the money went to servicing loans and trying to retire the loans. 
“That is where the money has gone to,” Dr Mahathir said. 

The prime minister said the people also expected the Pakatan government to give free money to them because this was a habit developed by former prime minister Datuk Seri Najib Razak.

“He (Najib) gives money to people freely and now the people expect us to give money to them freely. But we don’t have the money,” he said. 

On Aug 8, Guan Eng told Parliament that RM18 billion or 93% of the RM19.4 billion input tax credit under the GST system since 2016 had gone missing.

On Saturday, Guan Eng issued a statement lambasting Najib for trying to pin the blame on the Pakatan government for the missing RM18 billion GST refunds. 

“The RM18 billion shortfall in the trust fund for GST refunds were not incurred within one month, but built up over three years since April 2015. Further, this RM18 billion shortfall is as at May 31, 2018. Can Najib prove his claim that the new Pakatan government was able to spend RM18 billion in only three weeks, when Najib failed to return GST refunds by three years, what the law required to be refunded in two weeks?” Guan Eng asked in the statement.

Guan Eng also pointed to his speech in Parliament last week, which detailed that the Customs Department’s records had shown that RM19.4 billion GST input tax claims had not been paid as at May 31 this year. Of that, RM9.2 billion (47%) were for refunds claimed in 2018, RM6.8 billion (35%) in 2017, RM2.8 billion in 2016 (15%) and RM600,000 million (3%) from 2015. “The status of GST refund arrears amounted to RM19.397 billion as at May 31, 2018, while the balance left in the Refund Trust Fund was around RM1.486 billion only,” an excerpt of his speech showed.

He was responding to Najib’s denial yesterday via a Facebook post that the previous Barisan Nasional government had robbed the GST refunds, and the latter’s counter suggestion that the new government might have spent the money from the consolidated account that was supposed to have been transferred to the GST claims trust account, to cover the government’s monthly expenses after it zerorised the GST.

Najib also said that GST collections, similar to other tax collections and government revenue, were channelled directly to the consolidated trust fund. From there, he said the funds are transferred to the GST claims trust account every month to meet the provisions of the GST Act 2014.

Guan Eng said Najib must come clean on his role in the missing RM18 billion GST refunds. “Bear in mind that only the minister of finance can instruct that GST refunds be delayed beyond the legally stipulated two weeks period, or that GST payments be made into the Consolidated Revenue Account instead of the Fund for GST Refunds Account under Section 54 of the GST Act 2014.”

He also asked if Najib gave the authority to then Finance Ministry secretary-general Tan Sri Dr Mohd Irwan Serigar Abdullah not to transfer the RM18 billion into the GST Refunds trust account.

Guan Eng also pointed out that Customs Department director-general Datuk Seri Subromaniam Tholasy had stated on Aug 10 that he had requested for RM82.9 billion in total to be transferred to the GST Refunds trust account at the monthly Trust Fund Committee meetings chaired by Mohd Irwan since 2015. But RM19.4 billion had still not been transferred as at May 31 this year.

Guan Eng said he will propose to both the prime minister and cabinet to conduct an open inquiry headed by independent professionals into the missing RM18 billion GST refunds, once he receives a full report of an internal inquiry — headed by new Treasury secretary-general Datuk Seri Ismail Bakar — on the matter. “The ministry of finance will also co-operate with any authorities investigating this matter,” he added.

This article first appeared in The Edge Financial Daily, on Aug 13, 2018.

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