Employers say no to multi-tier levy system

KUALA LUMPUR (Nov 5): The multi-tier levy system has been strongly opposed by an employer group and industry players, which said it would increase the cost of business operations.

Favouring the existing levy system, Malaysian Employers Federation executive director Datuk Sham­suddin Bardan said the proposed system for foreign workers would impact the plantation and construction industries, reported The Star.

“The government is indirectly putting unnecessary pressure on these two industries despite wanting to see them lower their costs.

“How do you achieve such ideals when you impose a high levy on these two sectors?

“Employers would end up forking out more money to hire workers,” Shamsuddin said.

Based on the principle of “the more you hire, the more you pay”, Human Resources Minister M. Kulasegaran said the system was similar to Singapore.

The yet-to-be implemented system is open for feedback at this stage.  

Shamsuddin said the plantation and construction sectors rely mainly on foreign workers because locals avoid these labour-intensive sectors.

“In the agriculture industry, for example, more than 80% of harvesters and farmers are foreign workers.

“Employers will end up paying a hefty levy and may pass some of the costs to consumers.

“Employers are already struggling during this challenging period, so it’s better to continue with the present system,” Shamsuddin stressed.

Similarly, Malaysian Muslim Restaurant Owners Association president Ayoob Khan Muhamad Yakub said the multi-tier levy might lead to a hike in prices.

“There are over 12,000 Indian or Indian Muslim restaurant operators. But due to cost effects, shortage of labour and other reasons, many of those restaurants are closing down and switching to other businesses.

“The industry is looking forward to an alternative way of engaging with the government to address this issue for a win-win solution for all parties,” he highlighted.

Malaysian Indian Restaurant Owners Association president T. Muthusamy concurred, pointing out that the present system is more manageable.

“It will affect our business if the levy is too high.

“Maybe the objective of the new levy is to discourage owners from hiring foreign workers, but how many locals are willing to work in mamak shops?” he asked.