Finance Minister Lim Guan Eng speaks to reporters at Parliament in Kuala Lumpur August 8, 2018. ― Picture by Yusof Mat Isa

KUALA LUMPUR, Aug 8 ― The Goods and Services Tax (GST) has been repealed by the Dewan Rakyat following a second reading, three years after it was first implemented on April 1, 2015.

“Finally GST is dead,” Finance Minister Lim Guan Eng said towards the end of the debate.

Earlier on, Lim said that in order to counter the “dark economy” (ekonomi samar) or tax evaders, he will utilise the database developed under the GST system to ensure that the government will not incur tax evasion losses.

“Regarding the Sales Tax and Services Tax weakness to the dark economy because of monitoring issues, we are confident its adverse impact will be mitigated because we can still use the GST database to keep track of taxpayers.

“This means businesses will always be monitored. Also, the Royal Customs Department has also signed a memorandum of understanding with the Inland Revenue Board to share information and data.

“Through this initiative, any information uncovered will be jointly shared by agencies and with auditors and during examinations,” said Lim.

Touching on the failure of the Barisan Nasional (BN) government to refund the GST input tax credit to companies, Lim further elaborated on his earlier statement that the previous administration had only paid RM63.6 billion out of a total of RM83 billion ― leaving the figure of RM19.4 billion.

However, Pontian MP Datuk Ahmad Maslan challenged Lim and questioned his breakdown.

“I received a written reply to my question on how much the government has lost due to its three months tax holiday. The number I received after GST was zero rated was RM11 billion. The minister said that the unpaid tax refund for 2018 is 47 per cent of the total amount of RM19.4 billion.

“I just calculated that 47 per cent of RM19.4 billion is RM9.118 billion, which the government could have used to pay if they did not implement the tax holiday because they just lost RM11 billion from the tax holiday,” said Ahmad.

An irate Lim berated Ahmad, saying that it was pointless to argue or explain when a member of the previous administration still wanted to put the blame on the Pakatan Harapan government.

To make matters worse, Lim pointed out that members of the previous Cabinet, including Rembau MP and former Youth and Sports minister Khairy Jamaluddin and Jeli MP and former International Trade and Industries Minister Datuk Seri Mustapa Mohamed were left in the dark over the unpaid refund.

Khairy who openly admitted ignorance of the matter requested the breakdown on whether or not the fund was misappropriated, misallocated, mismanaged, or did not follow government guidelines but Lim was unable to furnish a more detailed explanation.

Lembah Pantai MP Fahmi Fadzil also requested that the government set up a Royal Commission of Inquiry, saying that since this matter only occured over the past three years, it is still fresh in everyone's mind.