Training levy may impede business growth


Imposing the Human Resource Development (HRD) levy to all industries will not be practical and may impinge competitiveness of Malaysian companies, said the Malaysian Employers Federation (MEF).

MEF ED Datuk Shamsuddin Bardan (picture) said the federation opposes the proposed plan by the Human Resources Development Fund (HRDF) to impose the levy on all economic sectors in the country, saying that the move is not viable to employers of some 73% small and medium enterprises (SMEs).

“If the government make things more difficult, SMEs might want to shut down, thinking of the hassles that they will have to go through in doing business,” he said.

Shamsuddin said the government should make it easier for the local industry, particularly SMEs, to run their businesses, instead of adding more financial constraints to the sector.

He said the regulator should first examine the levy-paying capability of small businesses in the country, before enforcing the 1% HRD levy on all sectors beginning 2019.

The Malaysian Institute of Architects, or Pertubuhan Akitek Malaysia (PAM), also strongly opposed the move as the architectural industry is regulated by the Lembaga Arkitek Malaysia (LAM), a statutory authority established under the Architect Act 1967, which regulates the practice of architecture and the registration of architects in Malaysia.

Its president Ezumi Harzani Ismail said for PAM and other professional bodies, the registration of graduates and professionals are under the regulatory body of the profession.

Therefore, the training requirements have to be in line with the rules set by the governing body.

Under the regulations set by LAM, a registered architect or graduate architect is required to undergo a continuous professional development (CPD) programme approved by LAM.

“Every year, each registered architect needs to collect a minimum of 10 CPD points before he or she is allowed to renew the annual registration,” Ezumi said in a statement yesterday.

This, he added, is to ensure architects exercise reasonable standard of skill and diligence that is accepted by the profession as stipulated by the Code of Conduct under the Architects Rules 1996.

“We hope the relevant stakeholders will take this matter into consideration, and shall not impose compulsory HRD levy on professional firms, including Architectural Consultancy Practices,” said Ezumi Harzani.

Yesterday, HRDF CEO Datuk CM Vignaesvaran Jeyandran said in a report by The Malaysian Reserve (TMR) that the government’s training arm is eyeing to impose levy on all employers, except for the banking, finance and construction sectors.

The expansion would result in over nine million contributors to HRDF.

Currently, eligible employers are subject to compulsory registration and a 1% HRD levy for each employee based on the monthly wages of the employee.

HRDF has currently collected about RM700 million in the levy from 63 subsectors and the fund is expected to be doubled should the proposal materialise.

TMR had previously reported that Malaysian employers are currently already in the losing side of doing business.

Last month, employers had to fork out 0.2% from their wage budget for the Employment Insurance Scheme contributions.

This is further dampened by speculations over a revision of minimum wage expected to be announced by the government in mid-2018.

Shamsuddin said employers using migrant workers are already burdened with the cost of the foreign worker levy that resulted in an approximate increase of 15.4% in overall cost.

He said the government’s decision to tax employers will dampen the indust ries’ growth.

“Employers will need time to prepare for their own budget and projection, without counting in policy revisions.

“The government should give enough time between three and four years for us to prepare for the eventuality of any revision in policies,” he said, adding that otherwise companies will have no choice, but to cut cost or pass it to the consumers.