Guan Eng moots open inquiry to probe GST trust fund

  • Aug 9, 2018
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PARLIAMENT | Finance Minister Lim Guan Eng will propose an open inquiry to investigate the alleged abuse of the GST Refund Trust Fund that he disclosed yesterday.

He said this in the Dewan Rakyat today, adding that he will suggest it to Prime Minister Dr Mahathir Mohamad once preliminary internal investigations are completed.

Lim said former Treasury secretary-general Irwan Serigar Abdullah must be aware that funds meant for the trust fund had been diverted to the Federal Consolidated Fund as revenue, but investigations are still determining to what extent the then finance minister I Najib Abdul Razak and then finance minister II Johari Abdul Ghani were aware or sanctioned it.

He noted that under the Goods and Services Tax Act 2014, finance ministers have the power to order part or all of the money in the GST Refund Trust Fund to be placed in the Federal Consolidated Fund.

“That is what we are doing internally and I intend to propose to the prime minister that we hold an open inquiry led by independent people from outside, who have experience.

“I think this will be a clear-cut investigation because there are records, documentation, paper trail and money trail. The documents are already there, so there is no running away.

“I will propose an open inquiry so that the people will know, can check and find out the truth about the case,” Lim said.

He said this while winding-up debates regarding the amendments to the Customs Act 1967 to bring it in line with the upcoming abolition of the GST and the reintroduction of SST on Sept 1.

He also stressed that input tax credits had not been paid to businesses not because there were delays due to incomplete paperwork or suspected fraud, but even businesses that had no dispute had not received their tax credits.

The arrears for 2015 is RM610 million, RM2.821 billion for 2016, RM6.782 billion for 2017 and RM9.184 million for 2018. The GST Act requires input tax credits to be paid within 14 days.

“And when we asked why, the answer was that there was not enough money. Why? The committee headed by the former treasury secretary-general (Irwan) said: ‘We adjusted our accounts so that it would show a surplus. The current account balance must show at least a surplus of RM2 billion to RM3 billion, so we delayed it.’” he said.

'Misled the House'

For the record, Irwan has reportedly denied Lim’s allegations and said money had been placed in government-consolidated funds and amounts due for refund were deposited into trust accounts on a monthly basis based on the Royal Customs Department’s requirements.

Although the debates today were regarding the proposed amendments to the Customs Act, almost the entirety of the heated two-hour session focused on Lim’s claims yesterday regarding the GST Refund Trust Fund.

Lim had accused the previous BN-led government of “robbing” the GST Refund Trust Fund by shifting money intended for the trust fund into the Federal Consolidated Fund to be spent as part of government revenue.

Among others, Ronald Kiandee (BN-Beluran) moved to refer Lim to Rights and Privileges Committee under Standing Order 35(12) for allegedly misleading the house.

He said the Customs Department could apply to the Ministry of Finance to transfer funds from the Federal Consolidated Fund to the GST Refund Trust Fund and it is part of the ministry’s standard operating procedure to do so.

However, Deputy Speaker Nga Kor Ming rejected the motion saying that Lim had not misled the house because he allowed former ministers from the previous administration the opportunity to respond to his accusations yesterday.

Meanwhile, Noh Omar (BN-Tanjong Karang) objected to Lim’s use of the term “robbery” to describe the alleged abuse of the trust fund citing Standing Order 36(6) which prohibits MPs from making malicious assumptions against other MPs.

Nga overruled Noh’s objection saying that Lim’s accusations were based on an internal audit, but Noh refused to back down.

Instead, he continued to question Lim despite being told to take his seat and challenged Nga to eject him from the parliamentary chambers.

Nga refused to entertain Noh’s challenge but instead said people watching the proceedings would judge his behaviour.