FMM wants foreign workers levy hike to be withdrawn
KUALA LUMPUR: Federation of Malaysian Manufacturers (FMM) has objected to the government’s move to double the foreign workers levy rate from RM1,250 to RM2,500 per worker per year and wants the increase to be withdrawn.
It said on Monday the doubling of the levy rate was “very hefty” since manufacturers were grappling with the challenging economic conditions and rising cost of doing business. It cited causes of rising costs were the new minimum wage level, higher energy costs, higher costs of raw materials inputs and lower sales revenue arising from the weakening of the Ringgit.
The FMM said the government should have called in industry stakeholders to discuss this decision and work together on a more acceptable schedule of increase as well as timing. It added this should have been implemented in phases when the economy improves.
“The Government’s sudden decision to double levy rate for the manufacturing sector with immediate effect is unacceptable. The government has not given due consideration to the significant impact on business sustainability and socio-economic consequences,” it said.
The FMM said the government recently informed employers that the levy burden would be shifted back to them.
“Employers had asked that levy rate should at least be maintained at the current rate until economic conditions are better. The doubling of levy rate is therefore most disappointing. The government has not taken into consideration employers' plea and cooperation,” it said.
The FMM said the sustainability of the businesses and jobs were also at stake, even for local workers when businesses find great difficulty in sustaining their operations.
“The government should look at business sustainability in totality, considering all relevant factors which would have an impact; and not in isolation of issue by issue.
“All issues put together become an insurmountable economic fire which could overwhelm and consume businesses, employees and suppliers throughout out the supply chain,” it said.
FMM said that while businesses were aware of the need to reduce dependency on foreign workers, any changes should be announced earlier and implemented gradually. This referred to the quantum as well as timing of the increase so companies had enough time to adjust.
“Changes and especially hefty changes with significant impact on business costs, should not be made overnight,” it said
It said on Monday the doubling of the levy rate was “very hefty” since manufacturers were grappling with the challenging economic conditions and rising cost of doing business. It cited causes of rising costs were the new minimum wage level, higher energy costs, higher costs of raw materials inputs and lower sales revenue arising from the weakening of the Ringgit.
The FMM said the government should have called in industry stakeholders to discuss this decision and work together on a more acceptable schedule of increase as well as timing. It added this should have been implemented in phases when the economy improves.
“The Government’s sudden decision to double levy rate for the manufacturing sector with immediate effect is unacceptable. The government has not given due consideration to the significant impact on business sustainability and socio-economic consequences,” it said.
“Employers had asked that levy rate should at least be maintained at the current rate until economic conditions are better. The doubling of levy rate is therefore most disappointing. The government has not taken into consideration employers' plea and cooperation,” it said.
The FMM said the sustainability of the businesses and jobs were also at stake, even for local workers when businesses find great difficulty in sustaining their operations.
“The government should look at business sustainability in totality, considering all relevant factors which would have an impact; and not in isolation of issue by issue.
“All issues put together become an insurmountable economic fire which could overwhelm and consume businesses, employees and suppliers throughout out the supply chain,” it said.
FMM said that while businesses were aware of the need to reduce dependency on foreign workers, any changes should be announced earlier and implemented gradually. This referred to the quantum as well as timing of the increase so companies had enough time to adjust.
“Changes and especially hefty changes with significant impact on business costs, should not be made overnight,” it said
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