Bosses’ group seeks EPF payment cut, suspension of taxes

Employers currently have to pay 12% to 13% of each worker’s salary to the Employees Provident Fund every month.

PETALING JAYA: Employers in the private sector are asking Putrajaya to allow a reduction of their contributions to the Employees Provident Fund (EPF) to 5% of their workers’ monthly salaries and to temporarily exempt them from several taxes.

Malaysian Employers Federation executive director Shamsuddin Bardan said these measures could help prevent retrenchments and the closure of businesses affected by the Covid-19 threat and the government’s movement control order (MCO).

He said the reduction in EPF payment should be allowed for eight months from March 18, when the order came into force.

Employers currently have to pay 12% to 13% of each worker’s salary to the EPF every month.

Shamsuddin called for an immediate decision to reduce the EPF burden on employers.

He also suggested that a company be made to pay off the balance of the statutory EPF contribution if it retrenches an employee.

He complained against a recent directive requiring employers to pay full wages and allowances during the MCO period, saying it was a heavy burden to bear under current economic conditions.

“Did the human resources ministry and the government ever think where the employers are going to get the funds to make all of these payments?” he said.

The following are some of his other proposals to the government:

  • Grant exemptions on payments to the Social Security Organisation and the Employment Insurance Scheme until Covid-19 is no longer a threat or at least until the middle of 2021.
  • Fully or partially exempt the private sector from paying to the Human Resource Development Fund until June 2021.
  • Suspend corporate tax payments for six months to allow for the injection of liquidity into the market and to improve the cash flow of corporations.
  • Limit income tax rates for individuals and corporations to a maximum of 18%.
  • Waive assessment rates on properties for the second half of 2020 and the first half of 2021.
  • Reduce the sales and services tax.
  • Allow for the dismissal of expatriates earning monthly salaries of below RM5,000.

Malaysian Retailers Chain Association president Gary Chua said retailers were expected to lose 80% of their business with the extension of the MCO.

He said they would be unable to pay salaries or run their businesses without government assistance and he proposed that Putrajaya pay at least a part of their workers’ wages.

He also said government-linked companies that were making money should give a portion of their profits to those in need.

Malaysian Hotel Association CEO Yap Lip Seng told FMT members of his group had seen their businesses bleeding even before the MCO came into force, with bookings for 190,000-odd rooms cancelled, translating into losses of more than RM75 million.

He said a recent survey showed that the hotel industry would lose more than RM560 million in the first two weeks of the MCO.

“Extending the MCO for another 14 days means the industry is set to lose over RM1 billion,” he added.

He disclosed that about 9% of the employees in the hotel industry had taken pay cuts, 17% were on unpaid leave and 4% had been laid off.

CLICK HERE FOR THE LATEST DATA ON THE COVID-19 SITUATION IN MALAYSIA