However, the committee said there had been a violation of the Goods and Services Tax Act 2014 when the funds were transferred into a Consolidated Revenue Account instead of the GST Refund Account.

It said this did not fulfil Section 54(2) of the act.

In a statement, PAC chairman Noraini Ahmad said the GST revenue which was not transferred to a fund for the refunds was used for development and management expenses.

“The previous administration overestimated the net GST collections by 65%,” she added.

This follows reports quoting sources as saying that the bi-partisan committee had disputed a claim by Finance Minister Lim Guan Eng that the previous administration misused money meant for tax refunds.

In August last year, Lim said the previous government had failed to pay RM19.4 billion in GST refunds from its implementation in April 2015 until May 31, 2018.

He claimed there was only RM1.49 billion left in the repayment fund.

Noraini said the refunds must be given within 14 or 28 working days, depending on how the applications for the refunds were filed.

“The policy of transferring 35% of GST collections from the government’s consolidated fund to the GST refund trust account as and when needed was not sufficient to cope with the GST refund claims,” she said, adding that the amount should be at least 42%.

She said the delay in transferring the funds from the consolidated fund to the GST refund trust account was to prevent a deficit in the country’s cash flow as operational funds cannot exceed revenue.

PAC, she said, recommended that the government ensure compliance with all laws to improve the organisation of the country’s financial administration.

“Government officials must advise the administration on the laws and procedures without fear or favour, especially in being more accountable in the areas of cash flow planning and fiscal discipline.”