PETALING JAYA: Putrajaya must stop implementing “overnight” policy changes, such as the steep increase in foreign worker levies as it could kill both SMEs and big industries.
In commenting on the recent foreign worker levy hike, Strategy Director of Parti Amanah Negara (Amanah), Dr Dzulkefly Ahmad told FMT the move was another knee-jerk reaction to present situations and a poorly conceived policy.
“This steep increase came as a shock to businesses and will kill our industries.
“The government must understand that we are facing dire times due to the rise in the cost of everything as a result of the falling value of the ringgit.”
Dzulkefly said in coming up with policies, the government must take into account the sustainability of businesses, adding that any levy that affected the operating costs of businesses, should be imposed gradually and only after discussions with the relevant stakeholders.
He said the government needed to have a proper mechanism to determine levy rates with Malaysia’s participation in the Trans-Pacific Partnership Agreement (TPPA) which would require employers to pay for the new levy rates on foreign workers.
“This must be properly thought through in the context of what the government wants to achieve through the TPPA.
“Increases in levies, taxes and any other fee would surely add cost to businesses and this will in turn make Malaysia less competitive and attractive as an investment destination.”
Dzulkefly also said the government must put the levy increase on hold and discuss it with stakeholders first as well as policy think-tanks.
This, he said, was because the levy would affect business operators who would then transfer the added costs down the line to consumers i.e. the rakyat.
“For consumers, the move ends up being another source of inflation and higher living costs.”
The foreign workers levy was introduced by the Government in 1992 because of the expenses incurred by the Government in providing general facilities such as clinics, roads and other public facilities, also enjoyed by Malaysian citizens.
On Sunday, Deputy Prime Minister Ahmad Zahid Hamidi announced the increase in the levy, beginning February 1, which would see Putrajaya gaining around RM2.6 billion in revenue.