Ag Gave Wrong Opinion To Save Guan Eng For Rompak Gst Remark

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That was the commotion yesterday when Dewan Rakyat Speaker, Dato Mohd Ariff bin Mohd Yusof made a decision to not send Minister of Finance, Lim Guan Eng to the Select Committee for disciplinary action.

This is odd because Pasir Salak MP, Dato Tajuddin Abdul Rahman was reprimanded for calling Deputy Speaker "pondan" and remarks against a Minister in Parliament.

Unlike Tajuddin, Guan Eng's "rompak" statement has more far reaching impact on the economy and country.

The PAC, with the majority from PH concluded that the RM19.4 billion of GST refund is not missing.

At the August seating in 2018, Guan Eng made the accusation in Dewan Rakyat that the GST refind funds dirompak or robbed by the previous BN government.

Taken by force or deprived? 


The full video of Guan Eng speaking with gusto in the August 2018 parliament session can be heard below:


Do not miss the one below:


According to the Merriam-Webster.com Dictionary, the meaning of rob are
Transvertive verb1a: (1) to take something away from by force: steal from, (2) to take personal property from by violence or threat;
b: (1) to remove valuables without right from (a place), (2) to take the contents of (a receptacle);
c: to take away as loot : STEAL rob jewelry

2a: to deprive of something due, expected, or desired
b: to withhold unjustly or injuriouslyIntransvertive verbTo commit robberyThere is no stealing, no act of force, removable of valuables without right or taken away or any act of robbery.

The conclusion no money is missing encapsulate those meanings.

Tommy Thomas lifeline


The DAP MPs and politicians are adamant there were robbery.

Guan Eng did not give a good argument for the GST refund claimants as being deprived of something due and it is unjustly withheld.

He said it was used for a different purpose, which again is not the argument by Attorney General, Tommy Thomas.

Nevertheless, they were holding on to the opinion of Tommy. Like in the Jalan Pinhorn bungalow corruption case, Tommy gave Guan Eng a lifeline.

A six month suspension may deny him from delivering the budget and lose his Ministerial position.

The Star reported:
It’s a violation of the law, says AG

NATION

Tuesday, 16 Jul 2019KUALA LUMPUR: The former administration’s move to direct all the Goods and Services Tax (GST) revenue into the Consolidated Fund account is a violation of the law, says Attorney General Tommy Thomas (pic).

Thomas said this was against Section 7 of the Financial Procedure Act 1957 and Section 54 of the GST Act 2014.

“This was a breach of fundamental trust law principles and trust accounting requirements.

“The (previous) administration’s practice to channel the GST revenue into the Consolidated Fund account is a neglect to Section 54 of the GST Act which assures that taxpayers will receive their refunds if they qualify,” said Thomas in a letter dated Oct 9, 2018, to the Public Accounts Committee’s (PAC) proceedings on the missing RM19.4bil GST refunds.

The letter is contained in the PAC report.

He said that although criminal liability on breach of trust was not discussed, the issue is “open to a criminal investigation by the police”.

Meanwhile, Opposition lawmakers want the issue over the “missing” GST refunds to be debated in Parliament by this week.

Their request will be formally made through an emergency motion after the Parliament’s PAC found that RM19.4bil of the GST credit refund was not missing as claimed by Finance Minister Lim Guan Eng.

“This means that the Bagan MP (Lim) had misled and lied to Parliament.

“He has gone against Standing Order 36 and we want the matter to be debated and he should be referred to the Rights and Privileges Committee in the current Dewan meeting,” Datuk Seri Ismail Sabri Yaakob told reporters at a press conference in Parliament yesterday.

He said it was crucial for the motion to be debated during the current Parliament meeting as Lim’s allegations that the RM19.4bil was “robbed and stolen” had cast a bad light on the previous administration.

“The allegations are serious and cannot be forgiven,” the Opposition chief added.

Datuk Seri Dr Wee Ka Siong, who was present at the press conference, said they had no problems accepting the PAC’s criticism on the procedural aspect on how the GST fund was handled.

“We can accept the PAC’s criticism but to say it was stolen is wrong,” he said.

Dr Wee also noted that the Auditor-General had confirmed that verified GST credit refund of RM5.06bil had been refunded following request by the Customs Department.

He also said that the Attorney General, in his response to the PAC, had not once mentioned the word “stolen”.

Dr Wee noted that he had raised the issue over Lim’s allegations in the Parlia­ment’s Special Chambers but received no proper response.

Meanwhile, Pakatan Harapan lawmakers lauded the PAC investigations, claiming that this was confirmation that the tax refunds had been stolen and misused.

Kota Melaka MP Khoo Poay Tiong said the PAC investigations confirmed that there was a shortfall of RM19.4bil in the GST credit refund. He insisted that the money was “stolen” after it was redirected to the Consolidated Revenue Account although meant for the GST Refund Account.

“This is a clear admittance that the money for GST refund was stolen because it is in effect taking and withholding money from taxpayers by force,” he said.

Khoo said he agreed with Thomas that the GST refund issue was still open to criminal investigations.

Bandar Kuching MP Kelvin Yii Lee Wuen said that channelling the GST refunds into a different account was a criminal breach of trust that warrants criminal investigations.

“The PAC findings clearly proved that the underlying fact is that a law was broken and the Barisan government had dipped their fingers into the money regardless of the justifications,” he said.

On Aug 8 last year, Lim had raised the issue over the RM19.4bil missing GST refund credit and said the money had been stolen by Barisan.

This prompted a heated debate with several lawmakers calling for the matter to be investigated by the PAC.Another media coverage by MMO here.

Consolidated Fund 

The establishment and administration of the Consolidated Fund accounts is made under Section 7 of the Financial Procedure Act 1957:


When GST is paid by businesses as collected from sales, the GST Act 2014 require the money be paid into the Consolidated Account. See Section 54 below of the act:


The amount to be refunded is ascertain as per section 57 below:


Basically the allegation made by DAP MP from Bandar Kuching is wrong and unsubstantiated. The channeling of money into a different account under the Consolidated Fund is required by the GST Act.

A clear case of commenting without reading the Act.

Same act of ignorance by the DAP MP from Kota Melaka. The amount meant for refund is hardly amount to RM19.4 billion but RM5.0 billion as said by BN MP from Air Itam. Again, RM19.4 billion is not stolen as in being taken away by force.

To say it is robbed as in being unjustly deprived, it is not correct and arguable. It could be the reason AG did not commit to say a criminal act has been performed. He took the safe play to leave it to the police.

If he intend to make life miserable for the previous BN government to pick on procedural matter, it will likely be done via police. There are unsubstantiated rumours that IP submitted by MACC or Police is pre-prepared from the AG office.   

With the GST Act dissolved, whats the point?

Wrong legal opinion


Nevertheless, one should realise that the GST refund had been administered in accordance with the prescribed law.

Tommy Thomas made his allegation purely based on Section 54 (1) to (4) of the GST Act, but accidently or conveniently was silent on Section 54 (5). It is in CAPITAL LETTERS below:
5) NOTWITHSTANDING SUBSECTION (2) AND THE PROVISIONS OF THE FINANCIAL PROCEDURES ACT 1957, THE MINISTER MAY AUTHORIZE THE PAYMENT INTO THE CONSOLIDATED REVENUE ACCOUNT IN THE FEDERAL CONSOLIDATED FUND OF ALL OR PART OF THE MONEYS OF THE FUND.With the authority of the Minister of Finance under the GST Act, is it really a procedural mistake, as mentioned by Wee Ka Siong, for the then government to apply the discretion to keep the money due for refund under Consolidated Revenue Account or any of the other two accounts?

The DAP MPs will not say yes, but they are not likely to say no. If they are arguing, they will divert their arguments on other matter.

The fact is the administration of the GST was done in accordance with the FPA 1957. Najib obeyed the law and in general, with few exceptions, the Malaysian GST law is similar to that of Singapore's.

If there was a delay as Najib claimed, it is to avoid government cashflow problems. An extract from NST below:
However, the committee (PAC) said Najib and former Treasury secretary-general Tan Sri Dr Irwan Serigar Abdullah concurred that the former prime minister had acted in accordance with Section 54(5).

Najib explained that he had acted on the accountant-general’s advice and in accordance with Section 54(5) when he decided that all GST revenue would be channelled to the consolidated revenue account.

“This was to prevent potential cash flow problems for the government.

“If there was a pressing need in terms of expenditure involving the needs of the rakyat, we likely used the money to fund projects.

“It is a cash flow problem because of the demand by other services for the government that we need to settle, and also development expenditure,” he said.Guan Eng made allegations then that the GST refund was misused to pay for 1MDB, a convenient political scapegoat of PH.

3The likelihood it is delayed to ensure sufficient reserves to pay for government monthly expenditure.

Fundamental trust law principle?

This leads to Tommy's opinion there was a breach in the fundamental trust law principle.

Probably he viewed money held in trust account should not be used for any other purpose but what it is meant to be. However, there is only RM1.5 billion money in the Consolidated Trust Account and it was not used.

The money to pay should already be available but it is not, thus no trust money was used for other purpose including 1MDB as claimed by Guan Eng.

It could mean the unqualified accountant Minister did not understand the Consolidated Accounts and jump to the wrong conclusion upon seeing the balance of RM1.5 billion in the trust fund and dishonestly sensationalised it as "robbed" for 1MDB.

Sources from within MOF claimed both Tony Pua and Guan Eng received explanation from officials but were adamant to mislead the public by cooking up a political lie against the previous BN government.

Be that as it may, several lawyers were of the opinion Tommy could be arguing along the legal  principle that specific laws (in the subsections of any section of the law) should take precedent over the general law.

Herein lies among the weakness in the GST law drafted.

It would not be sensible and prudent practise in  government financial administration to prioritise the paying of refund than paying its overhead. Failing to meet its overhead will limit government's smooth operation.

There is likelihood that the GST law may have specified the time rebate should be paid out. It is not quite practical as Section 57 clearly mentioned the payment of the rebate need to be ascertain. All the RM19.4 billion applied for rebate may not qualify.

It is believed that the application for refund just before the general election was exceptionally more than the usual trend. That leaves one to suspect many possibilities including promises for delivering votes.

The practise of Customs with respect to GST vis-a-vis Inland Revenue Board vastly differs. Tax paid to IRB goes into a trust account and within a prescribed number of days, it is transfered to the Consolidated Accounts.

There are many more weakness in the GST law that it makes one wonder whether the then Solicitor General slackened her work or was distracted by the adjoining door to the Attorney General's Office.

Then AG, Tan Sri Gani Patail may redirect blame to MPs for passing the law. But then, BN MPs had to follow the directive of the then BN Chief Whip, Tan Sri Muhyiddin Yassin without question.

Why is it they are all on the PH side now?

Guan Eng's fiscal mismanagement

MOF made an announcement to zerorise GST and gave a 3-month tax holidays. There was attempt to deny responsibility but it happened within days after Guan Eng's appointment as Minister.

They could not be any cabinet endorsement of the decision because the full cabinet appointment by Tun Dr Mahathir was only completed on July 17, 2018. The likelihood is Guan Eng made the decision on his own. 

The refund could have been made had Guan Eng be more patient and not try to satisfy some campaign whispering promise without pondering a bit more on the implication of such actions. The tax holiday disrupted government cashflow and affected the refund claimants.

The GST rebate accusation was a way to pull wool over the public eye together with the "rompak" accusation and RM1 trillion debt lie. The sudden and hasty decision to abolish GST resulted in the messy public accounts, massive social spending cutback and firing of government staff.

Government was saddled with the commitment to pay rebate in which there was no new inflow till more than half a year later.

On top of the GST rebate of RM19.4 billion, government is denied RM15 to 18 billion for the tax holiday and without GST cash inflow till SST collection come back on stream (@RM1.2 to 1.5b a week)

Dato Najib estimated in his FB a deficit of RM50 billion in revenue. With RM82 billion Petronas money "ripped off" ("dijarah") on top of the normal RM25 bil annual contribution, the cashflow shortfall for 2018 could be more than RM50 bil and effect carried over till 2019.

Government kept selling assets on pretext of bringing debt down, but yet government continued to borrow from abroad which now saw an increase in debt by RM100 billion.

As a result, the government's credibility at the international level was severely damaged.

Dato Dr Asyraff highlighted the 10 devastating effect of Guan Eng's reckless decision on GST in his facebook, which affected the stock market, bond market, commodity market, debt level,  government's corporate assets and economy.

Escaped discipline 


Guan Eng should be diciplined for his misdeeds.

Despite opposition willingness to withdraw application to bring him to the Select Committee he was adamant and remained arrogantly stubborn.

Mahathir's lawyer, Hanif Khaitri asked he be gentleman about it:


Alas, there is no action taken because Speaker's decision is final. Guan Eng will not face the disciplinary committee.

The opposition MPs could only walkout in protest, But that is realpolitik or reality of politics. The truth is determined, not by the facts or evidences presented, but by the number of seats.

The PH MPs would argue in private that we are in power and it is our turn to abuse the process.


This time the abuse is more blatant. There is a conflict of interest since the House Speaker's son is working in Guan Eng's office. When asked in Parliament, Ariff made no denial and admit it. He claimed he acted independently.

Knowing his partisan biasness since his days in the bench, was he fair and independent?

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