Developers to pay reduced foreign worker levy

KUALA LUMPUR: The government has introduced another cost-cutting measure — the reduction in foreign worker levy — for property developers to reduce house prices.

Finance Minister Lim Guan Eng said construction players now only have to pay 20 per cent of the RM10,000 levy for the extension of a temporary foreign worker permit from 100 per cent previously.

The remaining 80 per cent will be be borne by foreign workers, he added.

“The government is addressing worker shortage in various industries, including in construction, by allowing experienced foreign workers who have been working in Malaysia for 10 years to extend their stay up to a maximum of an additional three years, with an annual levy of RM10,000.

“After further consultation with the industry, I would like to announce the levy would be split 20-80 between the employer and the foreign worker,” said Lim at the Rehda Institute CEO Series 2018 here.

Lim said the leeway would help reduce the need to recruit new inexperienced foreign workers who would require additional onthe-job training, adding to construction costs.

The government hoped to reduce reliance on foreign workers in the long run, but no abrupt changes would take place so that market does not suffer a shock, he said.

For property demand to rise, Lim said, individual income has to increase but it was going to take some time.