KL foreign worker levy hike on hold after outcry

PUTRAJAYA • Following an outcry over a huge hike in the levy for foreign workers, the Malaysian government has agreed to put it on hold and hear out the employers before making a final decision after the Chinese New Year.

Deputy Prime Minister Ahmad Zahid Hamidi said the government is aware of employers' concerns and will listen to what they have to say on this issue.

Representatives from the Malaysian Employers Federation, manufacturers, guild associations and non-governmental organisations will be called to discuss the new policy, which was introduced following the recalibration of Budget 2016.

"We want to hear their views, but let us be reminded that the new move would contribute RM4 billion (S$1.35 billion) to the country's coffers," said Datuk Seri Ahmad Zahid.

The new rate came into effect on Feb 1. Foreign workers were previously charged different rates based on the sectors they worked in, but there are only two categories now. One is for the manufacturing, construction and service sectors, where the levy per foreign worker is RM2,500. The other is for workers in plantation and agriculture, and the levy is RM1,500.

The new rates are a huge increase from the earlier RM1,250 for those in the manufacturing and construction sectors. Those in the plantation sector paid RM590, while workers in the agriculture sector paid RM410. Those in the service sector previously paid RM1,850 but will now have to pay RM2,500.

The levy for foreign domestic workers remains at RM410.

Asked if there is a possibility that the new rates could be lowered, the Deputy Prime Minister said: "We will look into it. The Prime Minister called me when I was in Beijing and asked me to look at certain aspects of the policy, including the rate and its validity period."


A version of this article appeared in the print edition of The Sunday Times on February 07, 2016, with the headline 'KL foreign worker levy hike on hold after outcry'. Print Edition | Subscribe