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KUALA LUMPUR (July 15): To keep the RM19.4 billion in goods and services tax (GST) refunds in a consolidated revenue account violated fundamental trust laws and accounting requirements.
Attorney General Tommy Thomas said this in a letter to the Public Accounts Committee (PAC) dated Oct 9, 2018. The content of the letter is attached to PAC's report on the GST refunds that was released today.
"The government practices to place GST revenue into a consolidated account violate Section 7 of the Financial Practices Act 1957 and Section 54 of the GST Act 2014," said Thomas.
He explained the placement of the GST refunds into the consolidated revenue fund appeared to be done as a means to guarantee that eligible taxpayers would get refunds.
"Opinions from the Ministry of Finance (MoF) and the Royal Malaysian Customs said the placement of the GST revenue to the consolidated revenue account was in line with Article 97 of the Federal Constitution. The attorney-general, however, stated such practices violated laws," he said.
Thomas added that criminal liability regarding the breach of trust was not discussed as the issue was opened as a criminal matter by the police.
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