Now, Guan Eng claims BN owed RM16 billion in tax refunds

The finance minister says some of the 1,653,786 cases due to a shortage of transfers from the direct tax revenue collected to the Tax Refunds Trust Fund date as far back as six years.

(FMT) – In the latest turn of events involving the alleged misappropriation of taxpayers’ money, Finance Minister Lim Guan Eng today claimed that the former Barisan Nasional (BN) government failed to refund excess income tax and real property gains tax totalling RM16.046 billion as of end-May.

This follows his earlier statements that goods and services tax (GST) refunds of RM19.4 billion had not been returned to the people due to BN’s failure to transfer sufficient amounts to the relevant trust account.

In his latest statement today, Lim said the RM16.046 billion of outstanding tax refunds not returned by the Inland Revenue Board (LHDN) involved 1,653,786 cases of companies, individuals, societies and foundations.

For cases over six years of age which comprised 29% of the total, he said, RM3.090 billion was due to companies while RM1.503 billion was due to individuals, societies and foundations.

Cases between four and five years old comprised 22%, with RM2.759 billion due to companies and RM780 million owed to the three other categories.

Cases between two and three years old comprised 38%, he added, with companies owed RM5.212 billion and RM913 million owed to the rest.

Cases which were one year old, meanwhile, comprised 11%, with RM1.356 billion owed to companies and RM433 million owed to the rest.

Lim said the “huge amount” of outstanding tax refunds was due to a 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, the balance in the TRTF was only RM1.486 billion based on the records from the Accountant General’s Department, which is far lower than the RM16.046 billion required for the refunds that need to be made,” he said.

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

Therefore, he said, it was clear that the RM14.56 billion not transferred from the consolidated funds to the TRTF had already been recognised as government revenue by the previous government.

“This means that the federal government revenue that was reported by the previous government is not accurate and larger than what it actually was,” he added.

Lim claimed the arrears in tax refunds was due to the failure of the case management committee in the finance ministry which was chaired by former Treasury secretary-general Irwan Serigar to allocate enough money to the TRTF as requested by LHDN.

To relieve the taxpayers’ burden, he added, the Pakatan Harapan government had agreed to allow those with outstanding tax refunds from LHDN to make an application to off-set the amount against the tax payable for the current year.

“The off-set application needs to be submitted to LHDN to be verified and considered for approval. Besides that, the remaining tax refunds will be carried out based on the ability of the government depending on its fiscal position,” he said.