MBAM: Levy increase on foreign workers not a good idea


KUALA LUMPUR: The government should legalise illegal workers already in the country, instead of increasing the levy on foreign workers.

This is because doing so would directly increase the prices of goods and services, said A K Nathan, the Vice-President of the Master Builders Association Malaysia, today.

He said all industries, especially the construction sector, would be adversely affected by the doubling of the foreign workers’ levy from RM1,250 to RM2,500.

“A better solution for the government to generate revenue is to legalise illegal foreign construction workers and charge them the previous levy rate.

“This will also avoid burdening the business community, which is still struggling to adjust to the impact of the GST (Goods and Services Tax), higher construction costs and devaluation of the ringgit,” he told a press conference today.

Nathan was referring to the recent announcement by Deputy Prime Minister Ahmad Zahid Hamidi that beginning February 1, foreign workers’ levy for the manufacturing and construction sectors would cost RM2,500.

The service and agriculture sectors were also affected with the new rate now adjusted to RM1,850 and RM1,500 respectively.

This move, said Zahid who is also the Home Minister, would see Putrajaya gaining around RM2.6 billion in revenue.

Rubbishing Zahid’s reason for the levy increase, Nathan said the new rate implementation was untimely, given the current troubled economic situation in the country.

“Businesses also contribute to the economy, so why impose all these taxes that will only trouble national companies and subsequently, the country’s economy?”

He also warned that the extra cost companies would have to bear following the hike, would subsequently affect the price of goods and services in the consumer market.

The hike would also see an influx in the number of illegals coming into the country, he said.