PM says tax refunds to be paid only when govt has money – report

KUALA LUMPUR (Aug 27): The Prime Minister Tun Dr Mahathir Mohamad has said that the government can only refund overpaid taxes when it has the monies to do so.

In an interview with the news portal The Malaysian Insight, Dr Mahathir said that: “If we pay all of them the money, then we don’t have money at all.”

“We will pay back the money due to the people but only when we have the money.”

Dr Mahathir also revealed to the The Malaysian Insight that the Barisan Nasional (BN) government used the threat of taxes to “frighten anybody from financing the opposition”.

“You don’t understand the enormity of Najib’s (former prime minister Najib Razak) operation.

“If you are seen to be close to me, you will be visited by the income tax department and by the tax people and they made ridiculous demands.

“Even though you have showed evidence that you have paid in full, they said no you haven’t paid.”

Mahathir also told the news portal that people were “threatened with legal action and having their bank accounts frozen”.

“You know he (Country Heights Holdings Bhd executive chairman and major shareholder Lee Kim Yew) had paid all these taxes but they said he had to personally pay as well.

“They said, ‘you must pay and if you don’t, then we will freeze your accounts’. So, his work and all that had to be stopped and that is how he (Najib) tortures people.”  

Last week, Finance Minister Lim Guan Eng revealed that excess income tax and real property gains tax paid by taxpayers totalling RM16.05 billion as of May 31, 2018 were not returned by the previous BN government.

This is in addition to the outstanding goods and services tax (GST) input tax refunds totalling RM19.40 billion that have yet to be returned to businesses as of the same date.

“The RM16.05 billion of outstanding tax refunds not returned by the Inland Revenue Board of Malaysia (IRB) involves 1,653,786 cases of companies, individuals, societies and foundations,” Lim said.

Lim said the huge amount of outstanding tax refunds was due to the shortage of transfers from the direct tax revenue collected to the Tax Refunds Trust Fund (TRTF).

“Tax refunds can only be made using the balance in the TRTF. As of May 31, 2018, the balance in the TRTF was only RM1.486 billion based on the records from the Accountant-General’s Department, which is far lower compared with the RM16.046 billion required for the refunds that need to be made.

“In other words, there exists a shortfall of RM14.56 billion as of May 31, 2018, which resulted in 1,653,786 taxpayers not receiving their tax refunds as far back as more than six years ago.