Exclusive: Cops say IRB under probe for CBT

Tasnim Lokman

KUALA LUMPUR: THE Inland Revenue Board is being investigated for Criminal Breach of Trust.

Its sitting and past board members are expected to be called in by the Commercial Crime Investigation Department to shed light on the RM14.56 billion overpaid by taxpayers that were unaccounted for. To answer questions involving the massive “missing” sum that was to be refunded to 1,653,786 taxpayers is former Treasury secretary-general Tan Sri Dr Mohd Irwan Serigar Abdullah.

He was chairman of the Cash Management Committee in the Finance Ministry that was supposed to allocate enough money to the Tax Refunds Trust Fund (TRTF) as requested by the IRB to facilitate refunds.

The shortage of transfers from direct tax revenue to TRTF had been identified as the reason behind the huge amount of outstanding tax refunds due to taxpayers.

Bukit Aman Commercial Crime Investigation Department (CCID) director Datuk Seri Amar Singh, who confirmed this with the New Straits Times last night, said the case was being investigated under Section 409 of the Penal Code.

Attempts to get Irwan and a few members of the IRB board for comments were unsuccessful.

On Wednesday, Finance Minister Lim Guan Eng exposed another case of alleged misappropriation and misuse of taxpayers’ money by the Barisan Nasional administration.

Lim had said the previous government had failed to refund the excess income tax and real property gains tax paid by taxpayers, totalling RM16.046 billion, as at May 31 this year.

The more than 1.6 million taxpayers comprised companies, individuals, societies and foundations, and the cases dated back more than six years.

Lim, in exposing the matter, said: “This is tantamount to the falsification of accounts and misappropriation of tax refunds for other purposes, or to conceal the actual deficit and present a surplus.”

Lim, who pointed out that tax refunds could only be made using the balance in TRTF, said as at May 30, there was only RM1.486 billion in TRTF, based on records from the Accountant General’s Department, and that this, he said, was far lower compared with the RM16.046 billion required for the refunds that needed to be disbursed.

Lim also said it was clear that the RM14.56 billion not transferred from the Consolidated Fund to TRTF had been recognised as government revenue by the previous government.

He had since questioned the amount of Federal Government revenue that was reported by the past administration, saying that not only was it inaccurate, it was larger than what it actually was.

Putrajaya had agreed to allow taxpayers affected by the IRB fiasco to apply to the board to set off the amount against the tax payable for the current year. It had also pledged to refund what it owed to taxpayers.

The Income Tax Act 1967 allowed for the move to be applied only for the current year.

Putrajaya had also revealed that refunds on the Goods and Services Tax, which should have been made within two weeks as stipulated by law, still had arrears from 2015.

“The misappropriation of taxpayers’ money and falsification of accounts under the previous government, where 121,429 individuals and companies have not received their RM19.4 billion in GST refunds since 2015, is actually more serious than what was previously announced,” Lim said.

Meanwhile, an IRB spokesman, in explaining the “offset” mechanism, said as an alternative to refunds, those whom IRB owed refunds could also transfer their “credits” to family members who might have arrears.

He said all they had to do was apply for this.

“If taxpayers don’t need the refund, they can request for it (the credit) to be set off against the upcoming tax submission,” he told NST.

Taxpayers involved also had the option of using the amount to settle their arrears.

Under IRB’s client charter, refunds for online tax declarations (if any) must be made within 30 days. It takes 90 days for manual submission.

Putra Business School senior lecturer Dr Ahmed Razman Abdul Latiff said the government had to amend the Inland Revenue Board of Malaysia Act 1995 to resolve delayed tax refunds and set a deadline for it to be done.

“Legally speaking, there is no provision in the existing IRB Act requiring the agency to repay taxes within a certain period.

“However, morally, the government should not wait six years to refund taxpayers,” he said. Additional reporting by Nurhayati Abllah © New Straits Times Press (M) Bhd