Friday, August 17, 2018

Guan Eng accused of conning rakyat?

Malaysiakini - What Guan Eng should do about RM19.4b GST ‘robbery’ by P Gunasegaram:




The first thing that Finance Minister Lim Guan Eng should do is to establish whether there was a robbery or not from payments of the goods and services tax or GST to the government.

As I pointed out in this article, it is not a robbery if funds were merely moved from one government account into another. That’s plain common sense and cannot be disputed.

It only becomes a robbery if it was embezzled from one or both of the accounts. The two relevant accounts are the trust account into which GST refunds are made and the government’s consolidated revenue account into which revenue collected goes. Since Lim has access to this revenue account, he should be able to quickly say if any money from here has been transferred illegally and make the appropriate police reports.

No major investigation is needed to establish whether a robbery has taken place - all you need to do is to check and see if any money is missing, just as you check and see what is missing from your house after someone breaks in.

The second thing is more complicated and more subjective. Was proper procedure adhered too in paying out GST refunds? The GST Act unambiguously allows the refunds to be paid from the trust account. Customs director-general T Subromaniam said from April 2015 (when GST was imposed) until the end of May 2018, the amount of refunds claimed totalled RM82.9 billion but of that amount, only RM63.5 billion was paid out during that same period.

"The Customs Department had requested RM82.9 billion from the (government's) monthly trust fund for the purpose of GST refunds from April 1, 2015, to May 31 2018, but the full amount was not transferred (from the government's consolidated accounts) to the trust fund.

"As such, as of May 31, 2018, the trust fund still needs and is experiencing shortages to pay back RM19.4 billion in GST refund arrears," Subromaniam said, adding that the monthly trust fund meeting was chaired by the secretary-general of the Treasury.

This indicates that the procedure was for money to be transferred from the consolidated revenue account to the trust account as and when necessary. In fact, the then Treasury secretary-general said, “The Treasury allocates to the GST trust account monthly based on the amount required by the Customs Department and the financial position of the government.”

For better or worse, that was the procedure that was established by the government previously and if Lim wants to make improvements to that and implement a new system, by all means, and tell us how it works.

There have been many complaints about the GST refund system and delays in payment. But no one, including Lim and the Customs DG have explained why this is so. They should do so now. Does the government not have enough money to pay GST? If indeed that is the case, is it the right move to have abolished GST now which is going to considerably worsen the situation in future?

It’s time to govern, not blame

Okay, payments were late before, but why is repayment still late three months after a new government has taken over? Why did it take them three months to find out that the GST amount outstanding as at end-May 2018 was RM19.4 billion and there was only some RM140 million plus in the trust account? Isn’t the GST refund paid every two weeks?

More importantly, how are they going to make these repayments when there is a major revenue crunch ahead with the three-month GST and sales and service tax (SST) holiday, accounting for some RM15 billion in tax foregone as I explained in my last article? Also, an estimated RM3 billion will be foregone this year because of fuel subsidies given by the Harapan government, taking that figure up to RM18 billion.

Also remember, that while GST brought in RM44 billion last year, the new sales and service tax or SST is projected to bring in about RM23 billion only. Even that would be lower because of the extraordinary tax spending that would have taken place in the three months to Aug 31, implying lower spending in the last four months.

For the last four months of the year then, revenue collection will face a shortfall when compared to the same period last year of roughly [4/12 x (44-23)] or RM7 billion. Add this to the RM18 billion, and the sum could be about RM25 billion.

Pray tell us, Lim, how the government is going to raise the money. And in the meantime, what is going to happen to the GST refunds? Where is the money to repay that? Does the government have to resort to borrowing?

And has the monthly meeting to determine transfers into the trust fund to make GST refunds been held for May? And what about for June and July? Why give us the figure for end-May only? Does the government know exactly how much is outstanding in terms of GST refunds as of end-July? How often does the government intend to pay the refunds now? Will it be every two weeks as originally envisaged?

These are the things that the government needs to answer. It’s time to govern, not blame. For answers to problems, we need to be aware of proper terminology. Lim should scrupulously call a spade a spade. Robbery does not equate to improper or poor procedures, robbery happens when something is stolen. Debt is not the same as contingent liabilities, or government guarantees.

As an accountant, he should know how to use the right terms but the fact that he is not using them well, in fact he is using them wrongly and continues to do so, indicates that he is playing to the gallery and to con the common man on the street. In other words, to become popular and to show that he is doing so much for the public.


16 comments:

  1. If we are to hold Tony Pua to his words from 9 YEARS AGO that he can buy over all tolled roads for RM25B then we should also hold Najib to his word from just 2 MONTHS AGO (see below) that he can deliver RM5 Trillion, yes Trillion, exports to China. Not even the US or EU export that much to China.

    So which is the bigger "lie" - 25 billion or 5 Trillion?

    QUOTE
    Najib’s claim of China to import US$2 trillion goods - untrue
    Monday, 11 Jun 2018

    KUALA LUMPUR: Finance Minister Lim Guan Eng today hit back at ex-Prime Minister Datuk Seri Najib Tun Razak’s claims that China had committed to import goods worth US$2 trillion as part of the two pipeline agreements worth RM9.4bil as there was nothing of that sort documented.

    “All officials asked have stated that these claims by Datuk Seri Najib are untrue,” he said.

    There was no mention of the various “commitments” made by China as claimed by Najib in any of the Cabinet papers presented in 2016 and 2017, which approved the Suria Strategic Energy Resources Sdn Bhd (SSER) projects, Lim said in a statement today.

    “Unless of course that there are certain hidden Cabinet papers or “red” Cabinet minutes that no one has access to except the former Prime Minister himself,” he said.

    Najib, who was also the former Finance Minister, issued a statement on June 5, 2018 defending his administration’s award of two petrochemical and gas pipeline projects worth RM9.4bil to China Petroleum Pipeline Bureau (CPPB) by SSER.

    “Datuk Seri Najib deliberately did not focus on the principal questions surrounding RM9.4bil pipeline scandal but instead focused on alleged purported benefits to the country from signing this RM9.4bil contract,” the statement said.

    Najib claimed that he and China’s Premier Li Keqiang “had witnessed the signing of the Memorandum of Understanding (MOU) for the pipeline projects along with other projects while in Beijing on May 14, 2017.

    China had also committed to importing goods worth US$2 trillion over the next five years from Malaysia, invest up to US$150bil in Malaysia and offer 10,000 places for training and studies in various institutes in China as part of the pipeline deal.

    “We have also discovered that for some reason, the East Coast Rail Link (ECRL) projects and the SSER projects were always presented together in the same Cabinet paper by Datuk Abdul Rahman Dahlan, the then Minister in the Prime Minister’s Department for Cabinet approval,” he elaborated.

    This, he said, raised red flags as the ECRL and the SSER projects were vastly different in nature and business, involving different companies, contractors and geography, even if they were financed by the same China EXIM Bank.

    “Datuk Seri Najib has deliberately refused to respond to the principal question of this RM9.4bil scandal as to why payment of RM8.3bil, which is equivalent to 88% of the project value, was made even though only 13% of progressive work had been completed.

    “Why did he permit such disbursement to be made within the first year of a 3-year contract? Eighty-eight per cent of the funds had been disbursed despite the Multi-Product Pipeline (MPP) and Trans-Sabah Gas Pipeline (TSGP) projects recording only 14.5% and 11.4% progress completion, respectively, as at the end of March 2018, or an average of 13%,” Lim said, adding that the above completion rates have yet to be verified or audited.

    To recap, the MPP involved a 600km multi-product petroleum pipeline connecting Melaka and Port Dickson to Jitra, costing RM5.35bil.

    The TSGP involved the construction of a 662km gas pipeline from Kimanis Gas Terminal to Sandakan and Tawau, costing RM4.06bil. - Bernama
    UNQUOTE

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  2. "For the last four months of the year then, revenue collection will face a shortfall when compared to the same period last year of roughly [4/12 x (44-23)] or RM7 billion. Add this to the RM18 billion, and the sum could be about RM25 billion."

    This estimate IS wrong!

    Remember gst had a refund input component!

    44B (2017 gst collected) - 9.2B+6.8B+2.8B+0.6B (input tax credits owing to businesses) = 24.6B

    cf : 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)

    Assuming all the input tax credits refunds r settled as required under the gst act.

    24.6B gst collection (real term) is not bigger than the new sales and service tax or SST which is projected to bring in about RM23B!

    At most, the gst scheme ONLY allows the govt to spend future forward money currently.

    The way bn runs the gst taxation is like a pyramid scheme!

    Guna is slobbery in article research!

    KT is playing with this slobberiness to twist the story to manufacture fake news!

    ReplyDelete
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    1. Can we charge cheebye motherfucker kaytee under the defunct anti fake news act?

      CK.....Why God is so unfair letting this cheebye kaytee to get away scot? Now I know why this cheebye kaytee decides to be atheist

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    2. stop appealing to god - it's no use - when I said I did NOT fCk your mum I meant it - don't hope to be my son, not even god can make me tell a lie just to give you a false sense of family security

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  3. Robbery or no robbery is yet to be ascertained of course until evidence emerged that monies meant for refund has been used to payoff other expenses not linked to GST. That's also called abuse of powers/cheating/robbery in violation off and not complying with the GST Act regarding refunds.

    What is clear is that the previous regime under BN has used the GST refunds to rollover payments for other expenses which are yet to be determined involving criminal activities.

    Only knuckleheads think robbery means only bank robberies or thefts or physical carting off of tons of cash from the Treasury.

    What Govt. procedures to follow is Guna talking about when the laws are clearly broken as far as the GST Act is concerned? Any deviations or procedures different from what is established by any act of law is an abuse of the law even though a single sen is not lost.

    Main-main Kutu with Govt. monies is an abuse of The Law.

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  4. Just ask the Bar Council how many lawyers have been dis-barred for moving funds from Client's account to their operational account to pay staff salaries, rent, utility bills and other day-to-day costs.

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  5. Wakakaka... I think Gunasegaram, just like Ktemoc has a hidden agenda against the Pakatan Harapan government, especially Mahathir and Lim Guan Eng.

    Fortunately , many of us, even non-Accountants have good knowledge about the fundamentals of sound financial management.

    The disappearance of GST Refund money from trust funds for the purpose may or may not be a crime, but it is definitely financial misconduct.

    GST - which Najib, Ktemoc and Gunasegaram have been blowing their horns on how excellent it is - requires Input GST to be refunded expeditiously.

    Otherwise the whole GST system breaks down, and businesses which are unable to claim back their Input GST will have serious cash flow shortages, or will increase their prices to recover their money by other means. Both have occurred in Malaysia, a fact which GST Pom-Pom Girls refuse to acknowledge.

    Gunasegaram bringing in the issue of the suspension of GST after May 31st is Red Herring Bullshit.

    Fundamental financial management - liability needed to be paid in a specific period should be reserved in that period.

    Of course, the Najib administration never expected to lose GE14.

    IF Najib stripped GST refund accounts to spend in other areas, and needed future GST tax revenue to pay past refund liabilities, then serious Financial malpractice has occurred, and Najib GST is practically a Ponzi scheme - and that is a crime.


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    1. [ as a matter of procedure, the GST collected first went into the government’s consolidated revenue account and the amounts were transferred from there to the GST trust fund account monthly. So where did the “robbery” take place? Is putting money in the consolidated fund instead of the GST trust fund “robbery”? ]

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    2. It is financial malpractice.

      Money that was OVERDUE to be refunded by right back to taxpayers was not forthcoming.

      I have no problems with Nett GST taxation revenue ( Nett of refunds) to be fully transferred to the Consolidated Fund

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  6. KJ is now reminiscing.....and thinking about his future....aahhh...why stay on the Dark Side of The Force. The party he espouses UMNO to be already exists, on the other side of the aisle, which is only 10 feet wide...

    QUOTE
    It is going to be a long, long road to redemption for Barisan Nasional if it intends to regain federal power, said Khairy Jamaluddin. The Umno lawmaker said it might take more than one election to convince Malaysians who voted BN out after 60 years in power. “We have to accept that we start at a very, very low base. And this is a very, very long road to redemption. “It will take years, and it could take more than one election cycle, so we have to be prepared for that,” Khairy told The Malaysian Insight in an interview marking Pakatan Harapan’s 100 days in power. The former youth and sports minister said BN should acknowledge its mistakes as soon as possible and be a firm opposition. “We have to demonstrate to the public that even though there is a serious and huge trust deficit that still exists with BN, we are moving on. “We’re not in denial. Past is past. “We have screwed up. They voted us out. But we’re here to play our role as a good opposition and hopefully one day, the Malaysian public will consider us a good alternative government as well.” BN, one of the world’s longest-serving coalitions, lost power when Prime Minister Dr Mahathir Mohamad led PH to a thumping victory in the elections on May 9. The pact only managed to win 79 of the 222 parliamentary seats. Rembau MP and former Umno Youth chief Khairy Jamaluddin says BN must become a credible opposition and show voters that it can be voice for all Malaysians. From 13 parties, BN is now whittled down to three – Umno, MCA and MIC. The departure of several parties, mainly from Sabah and Sarawak, after the election loss, leaves BN with 54 seats, most of them held by Umno MPs. Khairy, who contested for the top post on a call for a total overhaul of the party, lost to Ahmad Zahid Hamidi. The former Youth chief now said Umno is stuck in an “existential” crisis and can either stick to what the party is known for, like racial politics, or reinvent itself to suit the current political mood. “As I’ve said, it’s not going to be easy digging ourselves out of this very very big hole that we find ourselves in. “Umno, which is the biggest party in BN, is facing an existential crisis, searching its soul, which way to go, whether it would stick to the old racial rhetoric, religious fear-mongering, associating itself with tainted characters and issuing incendiary statements. “Or do we show that we can reform, turn over a new leaf, recruit better members and leaders, professionals that are progressive.” The party needs to decide quickly on its direction before it can attempt to regain public support, the Rembau MP said. “At the moment, we are torn between the wrong stuff, which is racial hatred, right-wing, religious fear-mongering and the good stuff, which is a good credible opposition, talking on behalf of all Malaysians, defending the Malay community but in the right way, so that dilemma has to resolve itself,” Khairy said.
    If there are several by-elections, BN should be prepared to lose as Malaysians are still euphoric over PH’s victory, he added. “Obviously any by-election that takes place in the next one or two years, especially if it is not in a BN stronghold, we are going to lose. “That compounds the effect of the misery for us because you will continue to lose, lose and lose.”
    UNQUOTE

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    1. KJ is increasingly looking like a square peg in a round hole in ossified UMNO, which is still beholden to Najib.

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  7. lge can now partnering the other dog nazri (kt fav) to talk thief robber n murderer until the next ge, n lets azmin do the finance task.

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  8. i read raja liar "Islam is a political movement", base on his same logic wrt nabi muhammad islamic state (or raja liar political movement), supposedly its not a form of monarchy as well? r not the secular is one that preserve the monarchy in a modern constitutional sense? so wat is he talking abt?

    i still find him pretty stupid though he said he attend some courses in oxford.

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    1. HY, actually from my own reading Islam has always been a political religion. There's no separation of state and church in Islam. However, monarchy is NOT a mandatory item of Islam, but monarchies, theocracies, oligarchies and even dictatorships (eg. Malaysia) exploit Islam by positing that Islam supports the respective mentioned forms of government (including the monarchy) in the Muslim World, so as to wield control over the masses.

      constitutional monarchy is not necessarily a part of or protected by a secular state, eg. USA, France, Italy etc

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  9. I have had people bitching mercilessly about Lim Guan Eng airing all and sundry when it comes to the financial health of the country. It does not bode well, because it has been spooking foreign investors, not to mention Fitch, Standard&Poor, and well the currency exchange.

    However, all this needs to come to light, otherwise we would be in a poor position to evaluate what this new government is able to achieve in the next 5 years.

    LGE is a bit on the abrasive side; aggressive even, but he wants to establish that he is not at fault for the sorry state of our economy.

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