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Modified cash accounting system also shows RM16b missing: Lim

September 2, 2018 10:26 AM
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Modified cash accounting system also shows RM16b missing: Lim

PUTRAJAYA: A total of RM16 billion of unreturned taxes has remained missing from the Fund for Tax Refund Trust Fund (TBBC) regardless of whether the government uses the modified cash basis or the accrual accounting system, according to Finance Minister Lim Guan Eng.

Responding to former prime minister Datuk Seri Najib Abdul Razak's Facebook post, he said according to the Inland Revenue Board (IRB), and as verified by the Accountant-General 's Department, whereby the modified cash basis was used, it was found that the credit balance that had yet to be returned to taxpayers stood at RM16.046 billion as of May 31, 2018.

A total 1.65 million individuals and companies had not received the amount owed to them for the past six years, Lim said in a statement today.

"The seriousness of this situation was written in an official letter by the Director of the IRB to the (former) Treasury secretary-general, Tan Sri Dr Mohd Irwan Serigar, in 2016 whereby the IRB requested for the transfer of extra funds from the Consolidated Funds to the TBBC. However, this was ignored by Dr Mohd Irwan," he said.

Najib, who is also the former finance minister, said in a post on his official Facebook page yesterday that Lim did not understand that the government used the modified cash accounting system and not the accrual accounting standards employed by the private sector.

According to Najib, Lim had wrongly concluded that the Barisan Nasional-led government had misreported unreturned taxes as revenue and mistakenly accused it of falsifying accounts.

Lim said the accrual amounting to RM16 billion for more than six years was due to the failure of the Finance Ministry's Cash Management Committee, which met monthly and was chaired by Mohd Irwan, to execute the transfer of extra funds to the TBBC as was requested by the IRB.

""The TBBC is a trust account formed pursuant to Section 111B of the Income Tax Act 1967 for the purpose of channelling funds from the Consolidated Fund and is for the purpose of returning taxes to the taxpayers.

"It should be emphasised that pursuant to Section 111B(2) of the Income Tax Act 1967, only the Minister of Finance has the power to make any decision pertaining to the funds to be transferred from the Consolidated Funds to the TBBC," he explained.

Lim said Najib had to answer why he allowed for the RM16 billion unreturned taxes not to be returned to the respective 1.65 million taxpayers according to the timeframe set under the law.

Source: thesundaily.my

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