No plans to tax funds sent home by foreign workers, says Najib

  • Nation
  • Thursday, 23 Oct 2008

THE Government does not plan to impose a levy or tax on the RM18.1bil that foreign workers have sent or will send to their home countries this year, said Finance Minister Datuk Seri Najib Tun Razak.

Najib, who was replying as Finance Minister in the Dewan for the first time, said that up to June, the amount sent out of the country amounted to RM9.12bil, but was estimated to hit RM18.1bil by year’s end.

He told Datuk Halimah Mohd Sadique (BN €“ Tenggara) there were 2.1 million foreign workers in the country as of July 31, and that on average, each foreign worker sent home RM720 a month.

“The country’s reserve is strong and we can manage with the money being sent out, which amounts to only 4.7% of the current reserve,” said Najib.

He noted that the workers’ contributions spurred the country’s economic growth, especially in the plantation and manufacturing sectors.

“They form part of our labour force. For every 1% increase in the number of foreign workers, the actual gross national domestic production increases by 0.19%,” he said.

Najib assured the Dewan that the Government would continue to monitor money flowing out of the country through the relevant financial institutions.

The Government would also reduce the number of foreign workers by initiating automation in the manufacturing sector as well as introducing the Industrial Building System in the construction industry, he said.

“We target to reduce 400,000 foreign workers a year beginning this year until 2010,” he said.

Halimah had asked the minister to state the nation’s dependence on foreign labour which had caused an outflow of RM17.2bil last year and which was expected to increase to RM18.1bil by year’s end.

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