REHDA calls for building industry to be excluded from paying HRD Corp levy

• REHDA is of the view that the HRD Corp levy is one of the many contributing factors to increasing construction costs, and as such, industry players need to be exempted, and the situation has to return to how it was prior to March 1, 2021. 

KUALA LUMPUR (July 16): Real Estate and Housing Developers’ Association Malaysia (REHDA) has called for building industry players to be excluded from paying the levy imposed by the Human Resource Development Corp (HRD Corp).

The request came following concerns over HRD Corp, which has been in the spotlight after a slew of issues was flagged by the Public Accounts Committee (PAC) and the Auditor General, including suspicious disbursements, dubious property deals and risky investments.

“We maintain our stance that the levy to HRD Corp is unfavourable to industry players,” REHDA president Datuk Ho Hon Sang said in a statement on Tuesday.

REHDA said the building industry is governed by the Construction Industry Development Board (CIDB), which collects a 0.125% levy on the total value of construction work for training and development purposes, as per the amended CIDB Act 1994 (Act 520).

“According to CIDB Annual Report 2022, the board collected RM216.3 million levy from industry players, and we estimate the 2023 figure to exceed that given the country’s gross domestic product growth by 3.7% last year, as reported by Bank Negara Malaysia,” REHDA said.

In addition to the CIDB levy, related industry players — architects, engineers, quantity surveyors, town planners and land surveyors — are already obligated to pay annual renewal of registration fees and are subject to compulsory learning and training under the Continuing Professional Development programme.

REHDA highlighted that since the expansion of the Human Resource Development Fund Act 2001 (Act 612) in 2021, a further 1% of employees’ monthly wages is mandatorily paid to HRD Corp.

“The imposition of the additional levy on the building industry has affected companies' financials adversely and we strongly believe now is the most opportune time to reassess this requirement,” it added.

REHDA is of the view that the HRD Corp levy is one of the many contributing factors to increasing construction costs, and as such, industry players need to be exempted, and the situation has to return to how it was prior to March 1, 2021. 

"We hope the government can seriously consider looking into the matter, in line with efforts to reduce the cost of doing business. We are prepared to engage the government and relevant entities to further expound our point of view,” the association noted.

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