Why did the previous government withhold RM19.4 billion in GST refunds?

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The Previous Government Withheld RM19.4 Billion in GST Refunds Due to Alleged Misappropriation and Fiscal Indiscipline

The government owes businesses RM19.4 billion in Goods and Services Tax (GST) refunds, with some companies awaiting these reimbursements for over two years. It is alleged that the prior administration did not adhere to established guidelines and improperly diverted funds from a trust account designated for these refunds.
Misappropriation from the GST Trust Account

As of May 31, 2018, the total amount of input tax credit to be refunded stood at RM19.4 billion. This substantial sum was accumulated over several years, with RM9.2 billion from 2018, RM6.8 billion from 2017, RM2.8 billion from 2016, and RM0.6 billion from 2015. To compound the issue, only RM1.486 million remained in the trust account, suggesting a significant depletion of funds meant for these refunds.
Allegations of Fiscal Mismanagement and Deficit Cover-up

The previous government is accused of lacking fiscal discipline, engaging in wastage and leakages, falsifying accounts, and misusing tax refunds for purposes other than their intended reimbursement. These alleged actions were reportedly undertaken to cover up deficits and inflate the national debt. Furthermore, there are specific accusations that GST collections were utilized to shield the 1Malaysia Development Berhad (1MDB) entity.
Impact on Businesses and Consumers

The failure to refund companies has had a detrimental effect on their cash flow, forcing some to pass on the GST costs to consumers. This practice increased the financial burden on the public and simultaneously weakened the competitiveness of Malaysian businesses due to the administration's fiscal shortcomings. The Finance Ministry has indicated an intention to repay this debt and is studying methods to secure the necessary funds for full repayment in the upcoming year.

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Why did the previous government withhold RM19.4 billion in GST refunds?

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