Malaysia imposes new foreign worker levies

- Ram Chandra Giri, KUALA LUMPUR

Mar 21, 2016-

Malaysia has announced new levies for foreign workers, which is expected to affect some 700,000 Nepalis working there.

After a round of amendments on the levy fee policy, the Malaysian government has implemented a uniform annual levy of 1,850 ringgit per worker in production, construction and service sectors in Peninsular State, or West Malaysia, according to the Malaysian Home Ministry.

So far, Malaysia had been imposing annual levy of 1,850 ringgit on construction, 1,250 ringgit on production and 1,850 ringgit on services sectors. The policy, which was revised for the third time, has also determined a uniform 650 ringgit levy in agriculture and plantation sectors.

More than 700,000 Nepalis are currently working in Malaysia, and around 300,000 of them are involved in services, production and construction sectors. About 75 percent of them earn 900 ringgit per month—the minimum wage fixed by the Malaysian government, according to manpower agencies. The new policy means the Malaysian government will raise an additional Rs4 billion in revenue from Nepali workers annually.

Previously, Malaysian employers paid the levy on behalf of the workers, but the new system introduced on January 1, 2013, made the foreign workers liable to pay the charge. The Malaysian government had on January 28 announced new levies ranging from 1,500 to 2,500 ringgit depending on the nature of jobs. But it was forced to roll back the decision amid criticism from stakeholders.

Representatives of the Nepal Association of Foreign Employment Agencies said they are exploring new markets in Gulf countries as the new Malaysian levy rule has diminished attraction towards jobs there.

Low income, weak ringgit and higher recruitment costs have resulted in a steep decline in the number of Nepalis going to Malaysia. The Department of Foreign Employment figures show only 35,335 Nepalis obtained work permits for Malaysia in the first six months of the fiscal year, against 117,686 permit issuances in the same period last fiscal.


Published: 21-03-2016 08:43

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