RM400m GST input tax claims rejected so far

> Errors in filings by companies among the main reasons, says deputy finance minister

KUALA LUMPUR: Deputy Finance Minister Datuk Chua Tee Yong said around RM400 million of input tax claims have been rejected since the Goods and Services Tax (GST) implementation on April 1, 2015.

Speaking at a press conference after delivering a keynote address at PostBudget 2016 Dialogue here yesterday, Chua said part of the reason for the rejected claims was because of errors in filings by companies.

“Some are because they are not even supposed to claim. For instance, they may be exempt in nature but they are claiming input tax.”

“But at start, we would take it as an adjustment period. Instead of giving penalties immediately, Customs (Department) are giving guidelines on how to correct the errors,” he added.

To date, Chua said the government has refunded approximately RM5 billion in input tax to companies since April.

Commenting on the delay in tax refunds, he said Customs has taken several measures to improve the claims process to hit the 14 days refund period target.

He said at present, the GST refunds made within 14 days had increased by 41%.

“We expect the percentage will continue to increase due to several measures taken,” he noted.

Chua also said that the government has set a very high target in achieving the 14 days refund period, given that the average refund period implemented by 160 other countries is approximately 50 days.

He said the government welcomed accounting practitioners or the industry to look into how to strengthen the tax refunds process, in order to meet the 14day target.

Earlier, Chua reiterated that Budget 2016 is a challenging budget, as the government needed to balance maintaining fiscal consolidation, sustaining economic growth amid a challenging economic outlook, maintain low unemployment and implement the first budget in 11th Malaysian plan.

“However, the government remains committed to its fiscal consolidation by targeting to reduce the fiscal deficit from 3.2% (2015) to 3.1% (2016),” he added.

The dialogue, which is organised by Asian Strategy & Leadership Institute (Asli) and the Centre for Public Policy Studies aims to brief on how the implementation of Budget 2016 can cushion the impact of fiscal consolidation, rising prices and growth sustainability on the business community, investors and ordinary households.