PETALING JAYA: Former finance minister Najib Razak said his successor Lim Guan Eng doesn’t understand that the government uses a different accounting system from that of the private sector.
In a Facebook post, the former prime minister responded to Lim’s claims yesterday that the previous administration had recorded RM14.56 billion in unrefunded taxes as revenue, ultimately resulting in a shortfall in money for the Tax Refunds Trust Fund.
Lim had said this was deemed as “falsifying accounts”.
Najib said the government used the modified cash accounting system and not the accruals accounting standard used in the private sector.
Under the modified cash accounting system, all financial transactions are calculated and recorded when there are deposits and withdrawals of cash for the financial reporting period.
“Under this standard, assets not capitalised and liabilities are not recorded in the financial report.”
That, Najib said, was why Lim had come to the “incorrect conclusion” that the previous Barisan National administration had misreported unreturned taxes as revenue and had accused it of falsifying the accounts.
“Just like the confusion over the decimal point, the misunderstanding between the accounting systems is an easy mistake commonly made by anyone.”
Najib noted, however, that under the civil service transformation initiative during his administration, the government had been moving towards an accruals accounting standard