PETALING JAYA: The idea for employers to pay off their employees’ National Higher Education Fund Corporation loans has not gone down well with the Malaysian Employers Federation.
MEF president Datuk Shamsuddin Bardan asked the rationale behind employers taking on the financial burden if they were not allowed to bind their employees to the company in exchange.
“No employers would want to take on that kind of role if they are not given that option,” he said.
Shamsuddin was responding to the new measure announced by PTPTN for employers to take on their employees’ student loans in exchange for tax relief.
PTPTN chairman Wan Saiful Wan Jan said employers should not impose any sort of condition or bond on their employees.
Shamsuddin said that the employer should be allowed to bind the employee concerned for a certain period.
Although the method was voluntary, he said it was “lopsided” and unless the tax exemption amount was more than the loan repayment amount, there would be no real benefit for employers.
He also said that employers would consider if they could get a tax rebate of the same amount.
On PTPTN’s compulsory salary deduction based on percentages according to the amount earned by someone, Shamsuddin said this would be additional work for the employers.
Both systems are to take effect from Jan 1.
Tax relief for loan repayment