Key highlight in PAC's report is violation of GST law, Guan Eng says

KUALA LUMPUR (July 16): The key highlight in the Public Accounts Committee (PAC) report on "missing" goods and services tax (GST) refunds is the violation of the law on the use of funds, said Finance Minister Lim Guan Eng.

"The summary and recommendations of the PAC report did not touch on this matter," Lim said, referring to claims that he had made a misleading statement in the Dewan Rakyat last August when he claimed that GST funds meant for refunds have been "robbed".

"The key is that certain people have used this money for other purposes, instead of its stipulated purposes," Lim told reporters after officiating at a ceremony to appoint 62 new village development officers today.

Lim said the government will stick to its plan to address the shortfall in the fund for GST refunds by using the proceeds of a special dividend from Petroliam Nasional Bhd (Petronas).

"The Petronas dividend was paid for that purpose (GST and income tax refunds). That's why I said if they (Petronas) paid for that purpose, and we use it for other purpose, it will be a problem. So we will not use it for other purpose," he said.

Yesterday, Lim's political secretary Tony Pua said the government has used about RM24.7 billion of the special dividend to repay GST and income tax refunds.

Pua said Putrajaya has so far received RM26 billion of the RM30 billion special dividend from the national oil corporation.

In a statement earlier today, Lim said the PAC report summary shows that there was a shortfall in the fund for GST refunds because the previous government had used the GST collections to finance its operating and development expenditures.

"The PAC confirms the GST law was broken and GST refunds that were not paid out to taxpayers were used for other purposes.

"In early August 2018 when I first tabled in Parliament that there was RM19.4 billion worth of GST refunds left unpaid as of May 31, 2018, taxpayers in Malaysia were shocked to find out that the government had less than RM150 million in its fund for GST refunds to facilitate payment for GST refunds.

"The unpaid refunds worth RM19.4 billion involved 121,429 companies that included among the biggest conglomerates in Malaysia, like Petronas, Shell and Tenaga Nasional Bhd," Lim said.

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