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FMM wants total suspension of foreign worker levy

FMM In The News: THE EDGE, KUALA LUMPUR, Tuesday, April 7, 2020 - The Federation of Malaysian Manufacturers (FMM) has hailed the government’s additional allocation towards assisting small and medium enterprises (SMEs), but wants a total suspension of the foreign worker levy instead of a 25% cut.

Prime Minister Tan Sri Muhyiddin Yassin announced an additional allocation of RM10 billion for SMEs in the Prihatin economic stimulus package yesterday.

This includes a 25% reduction in foreign worker levy from April to December 2020. The FMM said in alleviating the cost burden on employers, especially those that employ foreign workers, the announcement is welcomed.

“However, given the impact of the levy expenses on overall employment costs, the FMM hopes there could be a total suspension of levy payment for a period of one year starting from April 2020,” FMM president Tan Sri Soh Thian Lai said in a statement.

Soh also commended the government’s addition of RM7.9 billion towards the wage subsidy programme, which now stands at a total of RM13.8 billion, and said it exceeds the FMM’s proposed RM12 billion figure.

However, he pleaded for the government to remove the condition for companies to report a 50% reduction in revenue in order to qualify for the wage subsidy, as well as for its employees to earn below RM4,000.

“We continue to appeal to the government to remove this condition in view of many companies that have yet to finalise their financial accounts for March 2020,” he said.

Furthermore, he said the condition for employers to retain their workers for the next six months would be a challenge in view of uncertainties over the continued viability of businesses in this unprecedented situation.

Soh said the government should review the stimulus package from time to time to also assist large corporations as SMEs are dependent on them as part of the overall business ecosystem.

“The FMM would like to reiterate the following recommendations, which have been in our various submissions to the government, and hopes to get the urgent attention on these areas: A waiver of interest for a moratorium period of six months. [And for the] moratorium to be extended to trade facilities, overdrafts and leasing,” Soh said.

He also called for the government to further reduce interest rates for the RM5 billion special relief facility for SMEs from 3.5% to 2%, lessen lending conditions including collateral requirements as well as reduce the bureaucratic red tape involved in accessing the facility, including the supporting documents required and conditions attached.

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