KUALA LUMPUR (Feb 6): Some RM7.8 billion of outstanding refunds for the Goods and Services Tax (GST) have yet to be repaid to taxpayers, causing cash flow of businesses to be negatively impacted, said the Federation of Malaysian Manufacturers (FMM).
Its president Tan Sri Soh Thian Lai said the reimbursement of the outstanding amount, based on Feb 2020 numbers by the Royal Malaysian Customs Department, is delayed as it is required to conduct field audits first.
“As Customs Department has a period of six years to conduct the field audits, we urge the government to expedite the GST refunds by only undertaking field audit based on company risk profile and instead, carry out verification audit which is sufficient for companies with good track record,” it said.
FMM's statement came after Finance Minister Lim Guan Eng said yesterday that his ministry has been tasked to prepare the stimulus package and that a multi-ministry discussion would be held to obtain their feedback, before formulating the package.
As at Feb 28, 2019, a total of RM4 billion in GST claims had been paidm involving 54,603 accounts registered with Customs.
The repayments were made after the government received RM8 billion — the first tranche of the RM30 billion special dividend — from Petroliam Nasional Bhd (Petronas).
Last year, Lim said the outstanding GST refunds stood at RM22.14 billion as at March 4, 2019 across over 298,457 statements by 168,839 registrants, and not RM19.4 billion as declared earlier, due to additional claims between May and December 2018.
He also said the previous Barisan Nasional government failed to return the outstanding RM19.4 billion to over 120,000 companies, while there was only RM1.49 billion left in the repayment fund for the period of April 2015 to May 2018.
However, the Parliamentary Public Accounts Committee (PAC) found that only RM1.5 billion of GST refunds were due as at May 31, 2018.
Meanwhile, RM9.6 billion worth of refunds was in review, whereas RM3.9 billion were related to issues of non-taxable supplies, RM900 million were related to exemption issues, and RM3.5 billion were still under investigation, according to the PAC Report on the GST Refunds shortfall.
GST, originally enforced on April 1, 2015, at a rate of 6%, was replaced by Sales and Services Tax (SST) on Sept 1, 2018, since abolishing the GST was one of the 10 main election pledges by the Pakatan Harapan coalition during the 14th general election (GE14).