Guan Eng can’t tell difference between public and private sector accounting, Najib claims

Kenneth Tee
Finance Minister Lim Guan Eng had said records by the Accountant General’s Department showed only RM1.486 billion remained in the Tax Refund Trust Fund, ultimately resulting in a shortfall in money to refund 1,653,786 taxpayers — most of them companies — for the past six years. — Picture by Yusof Mat Isa

PETALING JAYA, Sept 1 — In a return volley over Lim Guan Eng’s blame on his previous administration’s failure to return over RM16 billion to taxpayers, Datuk Seri Najib Razak claimed the new finance minister does not understand that the government uses a different accounting system from that of the private sector.

The Pekan MP was responding to claims that his then Barisan Nasional (BN) administration had failed to refund excess income tax and real property gains tax totalling RM16.046 billion.

“Looks like our Finance Ministerdoes not understand that the government uses the modified cash accounting standard and not the standard accruals accounting standard as used in the private sector,” Najib who was formerly prime minister and finance minister wrote in his Facebook page today.

He then sought to school Lim, a trained accountant, by explaining the difference between the two standards.

“Under the government administration, all financial transactions are calculated and recorded whenever there are deposits and withdrawals of funds for the financial reporting period under the modified cash accounting system.

“With this standard, assets are not capitalised and liabilities are not reported in the financial report,” he added.

Lim had said records by the Accountant General’s Department showed only RM1.486 billion remained in the Tax Refund Trust Fund, ultimately resulting in a shortfall in money to refund 1,653,786 taxpayers — most of them companies — for the past six years.

This subsequently led to the inadequacy of RM14.56 billion and government revenues of the previous administration were incorrectly reported and overreported, Lim said in a statement yesterday.

But Najib said it was that very reason Lim have made an “incorrect conclusion” that the previous BN administration had misreported unreturned taxes as revenue and accused it of falsifying the accounts.

“Similar to the confusion over decimal points, the misunderstanding between the accounting systems is an easy mistake commonly made by anyone.

“However during my administration under the civil service transformation initiative, the government was in the process of moving towards an accruals accounting standard for the coming years,” he said.

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