Thursday, July 18, 2019

AG gave wrong opinion to save Guan Eng for "rompak GST" remark

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.

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

Guan Eng's "rompak" statement, not only was in contravention of Parliamentary code of conduct, but had a far more reaching impact on the economy and country.

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

Taken by force or deprived? 

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.

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

Do not miss the part below:

According to the Dictionary, the meanings of rob are:

There were no stealing, or act of force, or removable of valuables without right or anything taken away or any act of robbery. No money was missing encapsulate those meanings.

It is similar to no money was robbed from 1MDB because it was Petrosaudi, IPIC, etc. that were denied money as instructed from within their organisation!

Tommy Thomas offered lifeline

Elating from AGC withdrawal from Jln Pinhorn case.
Notice Dato Sitham, hired DPP for SRC case on LGE left. 

The DAP MPs and politicians are adamant there were robbery based purely in Tommy Thomas's wrong and misleading opinion.

Guan Eng himself did not offer a good argument like GST refund claimants being deprived of money due or unjustly withheld. He merely said it was used for a different purpose.

Like in the Jalan Pinhorn bungalow corruption case, Tommy gave Guan Eng a lifeline. A six month suspension would have made him absent to deliver the budget and risk losing the Ministerial position.

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


Tuesday, 16 Jul 2019
KUALA 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.

Ignoring PAC report
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 of the Consolidated Fund accounts are 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 it be paid into the Consolidated Account. See Section 54 below of the act:

The amount to be refunded need to be ascertained first as mentioned in section 57 below:


Malay Regiment? 

The allegation by DAP MP from Bandar Kuching was wrong and unsubstantiated. A clear case of commenting without reading the Act.

Balance in the Consolidated Refund account hardly amounted to RM19.4 billion, but RM5.0 billion as highlighted by BN MP from Air Itam. Thus, RM19.4 billion was not stolen as in taken away by force. Same act of ignorance by the DAP MP from Kota Melaka.

To say it is unjustly deprived or witheld, it is not correct and arguable. The payment could be delayed but not denied.

There was basis and it could be the reason AG did not commit to say a criminal act was performed. He took the safe play to leave it to police.

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

With the GST Act dissolved, what is the point?

Wrong legal opinion

Harsh to call as idiot, but is he sufficiently capable to be
legal adviser to government? 

Tommy made his opinion based on Section 54 (1) to (4) of the GST Act, but accidently or conveniently left out 54 (5). It is in CAPITAL LETTERS below:
With the stated authority, there were really no procedural mistake. The then BN government could 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 and divert their arguments on other matter.

The fact is the administration of the GST was done in accordance with both governing laws. 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 justified 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.
The likelihood is that it was delayed to ensure sufficient reserves to pay for government monthly expenditure. Justifiably, goverment financial stability should be priority over immediate payment of GST rebate.

Guan Eng alleged then that the GST refund was misused to pay for 1MDB, a convenient political scapegoat of PH. What happen to the Tabung Harapan money collected from public under trust to clear the debt or 1MDB-SRC?

Fundamental trust law principle?

Can a compulsive liar be trusted? 

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 than the stated purpose.

There was only RM1.5 billion money in the Consolidated Trust Account and was not used for any purpose, especially for 1MDB as claimed by Guan Eng.

The unqualified accountant Minister did not understand the Consolidated Accounts. Upon seeing only RM1.5 billion balance, he made the wrong conclusion and dishonestly sensationalised it as "robbed" for 1MDB.

Sources from within MOF claimed officials gave Tony Pua and Guan Eng explanation, 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 for government to prioritise the payment of GST refund over its overhead.

Failing to meet its overhead will limit government's smooth operation. Time is required to process the claims.

There is likelihood that the GST law may have mistakenly specified a restrictive time for rebate to be paid out. Section 57 clearly mentioned the payment of the rebate need to be ascertain. Not all the RM19.4 billion claims qualified for rebate.

Sources within MOF claim the application for refund just prior to the general election was exceptionally more than the usual trend. It leaves the suspicion segment of the public was promised refund on all GST rebate claim.

The practise of Customs with respect to GST vis-a-vis Inland Revenue Board vastly differs. Tax paid to IRB goes into their own 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 in her work or was oftenly distracted by the adjoining door to the AG's Office.

Former AG, Tan Sri Gani Patail could 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 PH side now?

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.

The decision could not be endorsed by cabinet because the full appointment by Tun Dr Mahathir was only completed on July 17, 2018. Guan Eng made the decision on his own without consultations! 

Guan Eng could have been more patient. He could be in a haste to deliver a whispered campaign promise without pondering the implication of such actions.

The tax holiday disrupted government cashflow and affected the refund claimants.

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.

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 continued to borrow from abroad which now saw an increase in debt by RM100 billion.

Guan Eng's words were not believeable by foreign investors and 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 include on the economy, stock market, bond market, commodity market, ringgit and government's debt level, and corporate assets holding.

The GST rebate accusation and RM1 trillion debt lie was to pull wool over the public eye.

Escaped discipline 

Guan Eng should be diciplined for his misdeeds.

Despite opposition ready to withdraw the application to bring him to the Select Committee had he apologise, Guan Eng 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. It proves there is no Malaysia Baru or any paradigm shift in politics promised by PH.

Not only that, there is a blatant conflict of interest in which 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 ever fair and independent?


Anonymous said...

La incompetent AG!

Tun Dementia said...

Mahathir doing his 1980s loyar beruk introduction course for crash test dummy.

His cucu took atoq to atm to show he has money. Atoq refuse to believe and insisted withdraw money and place all in front of him as proof.

Ex Minister said...

Both Tun Dr M and Lim Guan Eng could be brought before the Committee of Privileges 10 times over for misleading the Dewan under Rule 36(12) Rules of Dewan Rakyat. This first attempt by BN already failed, what could be expected from the politically influenced Speaker. The “test” for Rule 36(12) is “objective” and not “subjective”. On prima facie case an standard below “beyond reasonable doubt” but above “probability”. The punishment under this Rule is severe and no politician ever retain his portfolio for breached or infringement.

Unknown said...

Kangaroo parliment

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