Malaysian authorities to probe Inland Revenue Board over 'missing' RM14.6b in overpaid taxes: Report

Malaysian authorities to probe Inland Revenue Board over 'missing' RM14.6b in overpaid taxes: Report

Barisan Nasional supporters in Langkawi
Barisan Nasional supporters in Langkawi on Nomination Day (Photo: Jack Board)

KUALA LUMPUR: Malaysian authorities are investigating the Inland Revenue Board (IRB) over RM14.56 billion (US$3.54 billion) in overpaid taxes that have gone "missing", the New Straits Times reported on Friday (Aug 24).

The money was meant to be refunded to about 1.6 million taxpayers, the report said.

Several past and present members of the IRB's board - including former Treasury secretary-general Dr Mohd Irwan Serigar Abdullah - are expected to be called in by the Commercial Crime Investigation Department to assist in investigations.

Mohd Irwan was previously the chairman of the finance ministry’s Cash Management Committee, which was responsible for allocating money to the Tax Refund Trust Fund.

The case is being investigated under Section 409 of the Penal Code, the New Straits Times cited Bukit Aman Commercial Crime Investigation Department director Datuk Seri Amar Singh as saying.

Section 409 of the Penal Code deals with criminal breach of trust by a public servant or agent.

The billions in unpaid tax refunds are due to "a shortage of transfers from the direct tax revenue collected to the Tax Refund Trust Fund", the New Straits Times report said.

On Wednesday, Finance Minister Lim Guan Eng said that the previous Barisan Nasional government had failed to refund about RM16 billion worth of overpaid income and property gains tax to taxpayers as of May 31 this year.

This, he said, was because of an insufficient balance in the Tax Refund Trust Fund, which stood at only RM1.49 billion as of May 31 this year.

“Tax refunds can only be made based on the amount of money remaining in the Tax Refund Trust Fund ... (The balance) is much lower than the sum required for the refund of tax credit amounting to RM16.046 billion which should have been refunded," Bernama cited Lim as saying.

Lim said it was clear that the previous government had assumed or recognised the RM14.56 billion that was not transferred from the Consolidated Fund to the Tax Refund Trust Fund as government revenue.

This meant that the federal government revenue reported by the previous government was inaccurate and over-reported, he said.

“The huge arrears in credit balance refund of over six years arose because the Cash Management Committee of the Finance Ministry which met monthly and was chaired by the former Treasury secretary-general, Dr Mohd Irwan Serigar, did not transfer a sufficient allocation to the Tax Refund Trust Fund as requested," he said.

“What the previous government had done was the falsification of accounts and misappropriation of the arrears in credit balance refund for other uses or to cover its deficit to show a surplus,” he added.

Source: Bernama/CNA/zl(aj)

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