LHDN should explain RM16 billion outstanding tax refunds, says Johari

Former second finance minister Johari Abdul Ghani.

PETALING JAYA: Former second finance minister Johari Abdul Ghani has called on the Inland Revenue Board (LHDN) to explain the failure to refund RM16 billion in excess income tax and real property gains tax over the past six years.

“There must be a reason for them not doing so. The LHDN should provide details on all of these cases and their respective reasons,” he told FMT, noting that former Treasury secretary-general Irwan Serigar Abdullah had been chairman of LHDN at the time.

The former Titiwangsa MP also voiced surprise that companies which did not get their money had not claimed their refunds, even after six years.

The matter surfaced after Finance Minister Lim Guan Eng said RM16.046 billion in outstanding tax refunds had not been returned by LHDN.

Lim said 1,653,786 companies, individuals and foundations were involved, adding that the outstanding tax refunds were due to a shortage of transfers from the direct tax revenue collected to the Tax Refunds Trust Fund (TRTF).

He also said tax refunds could only be made using the balance in the TRTF.

Johari said this was an operational matter between the Treasury Department, which comes under the finance ministry, and the LHDN management team.

“If Pakatan Harapan has a problem, it can always refer to the finance minister,” he added.

He said the government collected more than RM130 billion from LHDN every year, and that there was no reason why refunds could not be made.

He also told FMT that the government practised cash accounting, not accrual accounting, meaning that any refunds or claims would be considered as current year claims.

“I am surprised that companies did not make claims for their refunds even after six years,” he said. “LHDN should explain.”

Lim’s latest claim comes on the back of his statement that RM19.4 billion in goods and services tax refunds had not been returned to the people due to Barisan Nasional’s failure to transfer sufficient amounts to the relevant trust account.