Tenaganita: Reinstating levies immoral, unjust

The cabinet decision to reinstate levies on migrant workers is “immoral and unjust”, said the NGO Tenaganita, because it would further erode their small income, despite being among the “most exploited workers in the country”.

Tenaganita executive director Irene Fernandez said that if a migrant worker earns the minimum wage of RM900, the levy would take up between five to 17 percent of his monthly wages.

“On the other hand a Malaysian needs to pay taxes only when they earn more than RM3,000 per month. Thus migrant workers are in fact the highest tax payers in terms of income and levy,” she said in a statement today.

Despite this, she pointed out that a migrant worker derives no benefit from it, having to pay their own medical expenses and their passports being held by their employer, as well as a lack any form of social security net. 

“The government gains from the levy, but is not made accountable for how it is used,” she lamented.

At present, the levy ranges from RM590 to RM1,850 per year depending on which industry the worker is in, and is payable upon renewal of his work permit.

She urged that the government reverse its decision on Jan 30, thus returning the responsibility of paying for the levy to the employer rather than the worker.

The levy was introduced in 1992 as an additional revenue stream for the government, but then shifted the responsibly of paying the levy from the workers to his employer in 2009. This was to reduce the dependence on foreign workers.

However, the 2009 decision was reversed on Wednesday with immediate effect. Second Finance Minister Ahmad Husni Hanadzlah had announced that the decision is to reduce the rising costs faced by employers, particularly small and medium enterprises.

This was in wake of the introduction of the minimum wage scheme on Jan 1, which he said increased foreign worker’s pay by 30 to 50 percent.

With the decision, Irene said it was as if the government is confused about the purpose of the levy.

“With the reversal of that decision, it would appear that the government is no longer concerned about the country’s over-reliance on foreign workers,” she said.

‘Stronger incentive to hire foreign workers’

Since employers no longer have to pay for the levy, she said employers have a stronger incentive to hire foreign workers than local ones because they can cancel work permits and deport workers without paying wages at will. This would ultimately undermine the job security of Malaysians.

“In a situation where the migrant worker’s access to justice and redress is nebulous, employers will prefer to hire migrants and sustain an exploited, voiceless underclass of migrant workers,” she said.

Irene also expressed surprised that the Finance Ministry had issued a statement about the levy, whereas the Human Resources and the Home Affairs Ministries are silent on the matter, although they are directly responsible.

Meanwhile in a separate statement yesterday, Malaysian Trades Union Congress (MTUC) secretary-general Abdul Halim Mansor urged people not to vote for MCA, because they are not worker-friendly.

This was over MCA president Chua Soi Lek’s statement yesterday that foreign workers should pay for their own transportation and housing, in addition to the levy. If heeded, Abdul Halim said it would leave workers worse off under the minimum wage scheme.

He also said that the MTUC would lodge a complaint with the International Labour Organisation (ILO) about the recent cabinet decision.

“The Human Resources Minister had proudly declared to the ILO that all labour legislations and legal safeguards in Malaysia apply to all workers irrespective of their country of origin.

“Therefore the government’s reversal of its progressive policy is shocking and shameful,” he said.