Rafizi questions accuracy of govt’s fiscal deficit figures

The Pandan MP claims unpaid tax refunds have inflated government revenue figures.

Former economy minister and Pandan MP Rafizi Ramli asks whether the failure to refund excess taxes was due to administrative shortcomings or a deliberate effort to present a ‘narrative of fiscal success’. (Bernama pic)

PETALING JAYA:

 An MP today questioned the accuracy of the government’s fiscal deficit figures, arguing that unpaid tax refunds have distorted the country’s true financial position.

Speaking during the debate on the king’s address in the Dewan Rakyat, Rafizi Ramli (PH–Pandan) asked why successive administrations had failed to return excess taxes collected from taxpayers.

Rafizi, an accountant by training and former economy minister, said the federal government practised cash accounting rather than accrual accounting, which he said could overstate revenue figures.

Accrual accounting records revenues when earned and expenses when incurred, regardless of when cash changes hands, unlike cash accounting, which only records transactions when money is received or paid.

Rafizi said the tax revenue declared each year reflects the amount collected in that year, without deducting excess collections that should be returned to taxpayers.

As a result, he said government revenue figures may have been overstated.

Rafizi said the RM322 billion revenue figure declared for 2024 included RM33.3 billion in tax refunds that had yet to be returned to the public.

“This translates to a fiscal deficit of around 5.8% to 6%, not the reduction to 4.1% as announced,” he said.

“If the federal government’s tax refund commitments amounted to RM25.7 billion in 2022, RM25.5 billion in 2023 and RM33.3 billion in 2024, what is the real deficit if these refunds are settled as they should be?

“Why did the finance ministry, under the Perikatan Nasional administration and now the Madani government, fail to return excess taxes collected from individuals and companies?”

He questioned whether the failure to refund excess taxes was due to administrative shortcomings or a deliberate effort to present a “narrative of fiscal success”.

Rafizi said the nation’s finances must be managed transparently, adding that he hoped the government would provide the “true position” of the country’s fiscal deficit. - FMT