New levy rates for foreign workers effective today

The new levy rates for foreign workers have been revised and are effective today for Peninsular Malaysia only.

Home Ministry secretary-general Alwi Ibrahim said the new rate for the first category - covering the manufacturing, construction and services sectors - is RM1,850, whereas for the second category (plantations and agriculture) the rate is RM640.

He said the new rates entailed an increase of RM600 for the sectors in the first category, and RM230 and RM50 for the plantations and agriculture sectors respectively.

"The difference in rate increase is reflective of the income or incentives offered to workers in the particular sectors," he said in a statement today.

Prior to this, it was announced that the new rates for the two categories were to be RM2,500 and RM1,500 respectively effective Feb 1, but implementation was postponed after complaints from industry stakeholders, particularly from the labour intensive ones.

Alwi said the rates were reviewed following feedback received by the Home Ministry from 28 major associations representing industry at a meeting on Feb 16 whereby the ministry was informed that the increase in rates was too drastic and could stunt business momentum in view of global economic uncertainties.

He said the ministry was confident that the latest rates were still competitive and commensurate the facilities and infrastructure provided by the government which the foreign workers also enjoy.

"The government is of the opinion that these are the optimum rates for now to ensure economic growth is not affected and the objective of the government to reduce dependence on foreign labour by labour intensive industries is met.

"Industries are encouraged to take more proactive steps to switch to automation or mechanisation," he said.

Alwi also said the freeze on the intake of new foreign workers would be maintained for an indefinite period.

He said the government would focus on its rehiring programme to legitimise illegal foreign workers which started on Feb 15 and ends on June 30.

- Bernama