Cabinet temporarily defers foreign worker levy hike
KUALA LUMPUR: The Cabinet has decided to defer temporarily the implementation of the foreign worker levy hike, Human Resource Minister Datuk Dr. S.Subramaniam said.
He said the Cabinet made the decision at its last weekly meeting after considering requests by the employers, especially restaurant owners who felt the hike would be and added burden.
“The Cabinet felt that it was not the right time to implement the levy hike on foreign workers due to the uncertain economic situation,” he told reporters at Angkasapuri here on Friday.
Dr. Subramaniam said he raised the matter at Wednesday’s Cabinet meeting after gathering feedback from the employers and industry stakeholders recently.
“With this decision, the implementation of the doubling of levy payment for foreign workers will be deferred temporarily until the economy improves,” he said.
The Minister said once the country’s economy had improved, the Cabinet would announce the mechanism for the implementation of the hike.
It was reported that more than 375,000 foreign and local workers in 25,000 Indian, Muslim and Chinese food outlets risked losing their jobs if the foreign worker levy payment was doubled as proposed in the mini budget.
The mini budget tabled in Parliament recently, provided for the doubling of the foreign workers levy, except for those in the construction, plantation and domestic maid sectors.
Malaysian Muslim Restaurant Owners Association (Presma) president Datuk Jamarulkhan Kadir was quoted as saying that many restaurants found it difficult to sustain their businesses even without the annual levy per worker being increased from RM1,800 to RM3,600.
He was reported to have said that on top of the levy, the owners also had to pay for medical fees (RM200), visa charges (RM160) and insurance (RM100).
Malaysian Indian Restaurant Owners Association (Primas) president Datuk R. Ramalingam Pillai had also urged the Government to review the levy for the service sector and cancel it in view of the looming recession.
Ramalingam claimed that business across the board had also shrunk 30% in the past six months following the economic slowdown sparked by the global financial crisis.-Bernama