PETALING JAYA: The government will lower the extension levy fees for foreign workers who have worked in the country for more than 10 years starting in March.
Finance Minister Lim Guan Eng said the Cabinet made the decision during a meeting on Feb 20 to reduce the burden of employers.
The lowering of levies will apply to five sectors – manufacturing, services, construction, agriculture and plantation – from March 1, 2019 to Feb 29, 2020.
For the manufacturing, services, and construction sectors, the levy will be lowered from RM10,000 to RM6,000 while that for the agriculture and plantation sectors will be reduced from RM3,500 to RM2,000.
“The government is concerned about the challenges faced by businesses and industries in a global situation that is facing uncertainties,” said Lim in a statement yesterday.
There is no change in the levy fees for domestic workers.
Last September, Lim said employers would have to pay the entire RM10,000 levy instead of having the skilled worker pay the bulk of it as originally planned.
One day prior to that, the government announced that foreign workers who have worked in the country for more than 10 years would have to pay 80% of the levy, amounting to RM8,000, with employers bearing the remaining 20% for a three-year extension.
The reversal, Lim said, came following complaints by employers that their foreign workers could not afford to pay 80% of the total levy.
Following this, there was an outcry from various industry players who said that both employers and workers would be burdened by the levy fee.
Previously, foreign workers were only allowed to work in the country for a maximum of 10 years, said Tenaganita programme director Aegile Fernandez.
During the announcement of Budget 2019, Lim said the government would be reducing the extension levy for foreign workers who have served for 10 years or more in both the agriculture and plantation sectors, from RM10,000 to RM3,500 per worker per annum.
Lim had said that the shortage of workers in these two industries and the decline in prices of agricultural commodities had affected output in these sectors.