Thousands of family-owned restaurants and entrepreneurs will be forced to close down their outlets after the government announced a two-fold increase in foreign workers levy to RM3,600 from RM1,800.

As a result, the stimulus package will not be a boost to restaurant owners as the increase comes at the wrong time when the economy has slowed down and their earnings have dropped by about 30 to 40 percent.

mamak restaurant 271206 patrons The increased levy will also result in the creation of more illegal foreign workers moving from the plantation sector to restaurants as the levy for plantation workers is about RM400.

There will be a flood of people coming into the country as plantation workers and running away to work in urban restaurants to avoid paying the high levy of RM3,600.

Restaurant owners said that locals were not willing to be waiters or dishwashers because the job is seen as demeaning, dirty and dangerous.

With the increase in levy, an employer has to pay about RM12 per day towards the levy, in addition to daily wages of about RM30.

Together with the levy of RM3,600, medical costs of RM200, visa charges (RM160) and insurance (RM100), an employer will have to pay more RM4,000 in expenses for a year to employ a foreign worker in Malaysia.

"The closing down of restaurants will result in furniture suppliers, vendors, vegetable sellers, farmers, fishermen, fishmongers, transport workers, dairy workers, meat suppliers and others having to close their business or retrench their staff," said Indian Restaurant Owners Association president R Ramalingam Pillai.

"This will result in a chain reaction and no stimulus package will be able to save the livelihoods of thousands of Malaysians who will be unemployed.

"The government must review the doubling of the levy and cancel it as Malaysia is headed for a recession," he added.

'Number of illegal workers will increase'

The Malaysian Muslim Restaurant Owners Association president Jamarulkhan Kadir said the increased levy and other expenses would trigger an increase in operational costs, followed by rising costs of living.

mamak restaurant 271206 drinks dept "More foreign workers will come in with a plantation work permit which cost around RM400. It will also result in foreign workers staying on as illegals as the levy for a waiter is extremely high."

Jamarulkhan added that foreign workers who wanted to work in Malaysia will also enter the country on a social visa and stay on as illegals.

"It is not fair for the government to penalise foreign workers because of an announcement that 70,000 Bangladeshi workers were coming to Malaysia," he said.

Ramalingam, Jamarulkhan and members of other restaurant owners associations are urging the government to revoke the increased levy and introduce more incentives for restaurants, as eateries form an integral part of society and play a role in boosting the country’s tourism industry.

At a press conference to be held in Kuala Lumpur today, members of five restaurant owners associations will demonstrate their unhappiness over the government’s decision to increase foreign workers levy by symbolically pulling down the shutters of a restaurant.