KUALA LUMPUR (Aug 8): Finance Minister Lim Guan Eng stressed that the alleged misappropriation of the Goods and Services Tax (GST) input tax credit into the consolidated fund is "legally wrong", calling it "creative accounting".

Lim told reporters at the Parliament lobby that the previous Treasury Secretary-General under the Barisan Nasional government was "definitely in the know" but it wasn’t clear who else was involved.

“For us, internally, we want to have something definite. We want to look at the circle of decision-makers. (We believe the) former Treasury Secretary-General is definitely in the know but as far as the others — this is something we want to identify. It is not a red file but a falsification of accounts.

“I think only the highest (person) can authorise that. Why didn’t he put it in the trust fund? The account is very important. If you don’t do it, then that is a wrongdoing,” he said.

Lim explained that this is creative accounting as the previous Government had used the people's money and treated it as revenue.

“The act of not returning the money itself...not putting it in the trust account but to continue to keep it in the consolidated fund, and treating it as revenue is wrong. I would think it is legally wrong.

“It was supposed to be put in the trust account but was not. Is that not a crime? I would think it is. There is a wrongdoing. Some say it is a criminal breach of trust (CBT) (and) we will leave it to the experts to decide,” he said.

Asked if there was any link to former Prime Minister Datuk Seri Najib Razak who was also the Finance Minister, Lim said that would only be known later.

“Najib is facing charges (now), so I don’t want to say anything as it is not appropriate. So let this investigation have its final conclusion on the circle of decision makers,” he said.

He noted that an internal investigation is being conducted by the Royal Customs and Excise Department and special officers of the Ministry of Finance (MoF) before the Prime Minister and Cabinet decide on the next course of action.

Lim who earlier moved the passing of the GST (Repeal) Bill 2018 was commenting on the alleged misappropriation of some RM18 billion or 93% of the RM19.4 billion input tax credit under the GST system since 2015.

Lim said there was a total of RM19.4 billion input tax credit (to businesses) till May 31 this year since 2015 but only RM1.5 billion remained in the trust fund (where GST refunds were supposed to be deposited by the Government).

Out of the total input tax credit, RM9.2 billion or 47% was recorded between Jan 1 and May 31 this year, RM6.8 billion or 35% in 2017, RM2.8 billion (15%) in 2016, and RM600 million (3%) in 2015 (from April 1 to Dec 31, 2015).

On whether the Public Accounts Committee should look into this matter, he said it is already being investigated internally.