Finance Minister Lim Guan Eng dropped another bombshell last week. He announced in Parliament that a total of RM18 billion in input tax credit for business owners had gone “missing”.
According to Lim, the Goods and Services Tax refunds were put into a special trust fund but the money was later deposited into a consolidated fund to be spent “freely”.
It would be a serious abuse of power by the previous government, which had implemented GST in April 2014, assuming Lim has concrete evidence.
Following his disclosure about the national debt soaring to RM1 trillion, the latest revelation comes as another shock to the business community.
While such transparency is much appreciated, his remarks may also cause sleepless nights for business owners who have yet to receive their refunds as it appears there is no way to get back the missing sum. Worse still, the government does not have much spare cash in its coffers.
Cash flow is the lifeblood of businesses and any delay in getting refunds or collecting payment would bring drastic consequences. Imagine the impact of a delay beyond six months.
Lim is aware of the flood of complaints about the GST refunds. But businesses would perhaps prefer more reassurance on how the finance minister plans to tackle serious problems such as this after a wrongdoing has been uncovered.