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Associations: Too Steep a Levy at a Difficult Time The Star l 5 February 2016 Associations: Too steep a levy at a difficult time PETALING JAYA: More business associations have joined the growing bandwagon protesting the rise in foreign workers’ levy. The Sarawak Oil Palm Plantation Owners Association (Soppoa) said it was disappointed that the Government did not consult with the relevant stakeholders before increasing the levy. “The palm oil industry is already suffering from severe financial burden arising from lower cash flow from depressed palm product prices, higher labour and production costs, numerous tax structures and rising bank borrowing cost. “It should also be noted that labour cost will rise by another 15% with the mandated increase in minimum wage to RM920 by July 2016,” it said. It added that the new levy rate would see a further 154% increase for the plantation sector and 147% hike for palm oil mill workers. The association said that plantation companies would now be forced to absorb the new levy rate as they had to contend with worker shortages, and a lack of local workers willing to take over the jobs held by foreigners. The Malaysian Estate Owners Association (MEOA) said that other palm oil‐producing countries stood to gain from the levy hike as local producers would no longer be able to compete internationally. “Our loss is their gain. This has adverse implications on the sustainability of this industry in Malaysia in the long run,” it said in a statement. “Higher foreign worker levies might also induce more to become illegals, depriving the Government of the intended revenues and worsening the problem of illegal workers,” the MEOA added. The East Malaysia Planters’ Association (EMPA) said even the Government stood to lose out if smallholders opted not to renew the work passes of their foreign staff after the hike was implemented. “It is generally accepted that the drop in palm oil yield in Sabah last year was due largely to the shortage of skilled workers. “Should this situation be further aggravated, all stakeholders including plantation owners as well as the Government will stand to lose in the long run,” said EMPA chairman Masri Pudin. Malaysian Associated Indian Chamber of Commerce and Industry (Maicci) president Tan Sri K. Kenneth Eswaran said the hike would prove destructive to local businesses. “A rise in foreign workers’ levy will directly increase the production cost and cause small businesses to wind down,” said Eswaran in a statement. He added that this could lead to inflation in the country. Among the other powerful business associations that have also objected are the Associated Chinese Chamber of Commerce and Industry, Federation of Malaysian Manufacturers, Malay Chamber of Commerce Malaysia, Malaysian Employers Federation, SME Association of Malaysia and the Master Builders Association. All had stressed that the hike came at too steep a price and at a difficult time. Responding to objections by industry players, Deputy Prime Minister Datuk Seri Dr Ahmad Zahid Hamidi said in Beijing on Wednesday that the Government would look into the grouses of employers regarding the hike. “We will not hesitate to look into the issue even though the new rates are enforced effective Feb 1.” Minister in the Prime Minister’s Department Datuk Seri Dr Wee Ka Siong was quoted in The Star yesterday as saying that the Cabinet was concerned about the feelings of the business community. Dr Wee said he, along with fellow ministers Datuk Paul Low and Datuk Seri Mah Siew Keong, felt there was a need for a review. .
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