MP questions profit-making privatisation of GST refund scheme for tourists

PETALING JAYA, April 21 ― A PKR lawmaker questioned today the government’s decision to privatise the Goods and Services Tax (GST) refund scheme for tourists that collects a commission from each refund.

Under the scheme, tourists are allowed to claim refunds on GST-taxed goods purchased from approved outlets, which are outlets that bear the Tourist Refund Scheme (TRS) logo.

But according to Pandan MP Rafizi Ramli, the tourists are not given the refund in full as 15 per cent of each claim will be collected as commission by Iris Corp Berhad, the firm tasked to manage the TRS.

“The public will consider this a leakage of the GST collection,” Rafizi told a press conference at the PKR headquarters here today.

He revealed that Iris Corp has set up a joint venture with Switzerland-based Global Blue, for a period of five years to handle the scheme.

The PKR vice-president, who used to work as an accountant, noted that governments in the UK and in many European Union (EU) countries, on the other hand, manage such Tourist Refund Schemes themselves.

“I’m not sure if other countries deduct 15 per cent,” said Rafizi, noting that the UK refunds tourists in full.

“If the government had decided to charge 15 per cent as a handling fee, it looks like quite a lucrative business. This should have been retained by Customs so it can generate revenue for the country,” the Pandan MP added.

He also said manpower should not be an issue for the Customs Department to manage the TRS system as it would only require a small unit at the headquarters and about 10 staff at each of the eight or nine counters at international airports throughout the country.

Rafizi added that the RM150 million cost to set up the TRS was small compared to the RM365 million that has been spent to promote the GST.

“I call on the government to review this privatisation scheme and to shorten the length of the concession given to the private joint venture company so that the government’s GST collections will not be turned into profits by the private company that received the concession,” he said.