SOME RM15 billion out of the RM19.5 billion outstanding goods and services (GST) tax refunds could be unverified claims, Rembau MP Khairy Jamaluddin said today.

He said the number is based on the auditor-general’s report and questioned why Putrajaya needed a special dividend from Petronas.

“We were told in Parliament that the outstanding tax refunds amounted to RM19.5 billion. This is why the government had requested for a special dividend from Petronas.

“According to the auditor-general’s report, a bulk of the claims are yet to be verified.

“If the claims are valid, then there is no issue, but if they are yet to be verified, then there is a problem there.

“You have taken money from Petronas that you didn’t have to take yet or not take at all,” he said at a forum on government accountability in Sunway Hotel today.

Khairy was referring to the government’s request for a RM30 billion dividend from Petronas to pay off the outstanding tax claims.

Petronas said last Friday it will disburse the RM30 billion in several tranches over the course of the year.

The outstanding GST refunds are being scrutinised by the Public Accounts Committee. 

Khairy questioned the government’s urgency seeking the special dividends to pay the tax refunds, when a bulk of the claims are yet to be verified.

He said under the GST law, the government is allowed six years to refund claims.

Khairy added that the opposition raised the issue in Parliament several times, but the government maintains that the RM19.5 billion has been verified. 

Khairy said the outstanding refund is crowding the government’s spending leg room hence limiting allocation for public expenditure. 

At a panel session earlier, he said Malaysia’s tax system, except the income tax regime, is regressive. 

He said the GST was unpopular because it was implemented when the 1Malaysia Development Bhd scandal came to light, hence causing distrust among the public on what the tax collected is being used for. 

He said tax collected should be redeployed to the sector from which it was collected.

For example, he said, collection from a soda tax could be used for healthcare instead of being channelled into a consolidated fund. 

Khairy said this will instil a sense of accountability, taxpayers will know what they are paying for.

He said there is room to improve the tax regime, such as increasing the threshold for the high-income tax bracket.

Khairy said capital gains and wealth taxes are some regimes that can be studied further. – March 12, 2019.