The Federation of Malaysian Manufacturers (FMM) today said that it strongly objects to the “sudden and steep increase” in foreign workers levy rate from RM1,250 to RM2,500 per worker a year.

In stressing that the move enforced with immediate effect is unacceptable, FMM said the government has not given due consideration to the impact on business sustainability and socio-economic consequences.

“The government had recently informed that the levy burden would be shifted back to employers and employers had asked that the levy rate should at least be maintained at the current rate until economic conditions are better.

“The doubling of levy rate is therefore most disappointing. The government has not taken into consideration employers' plea and cooperation,” FMM said in a statement.

FMM also said that manufacturers already have to contend with the current challenging economic conditions and the rising cost of doing business.

Among others, it cited the new minimum wage level, higher energy costs, higher costs of raw materials inputs and lower sales revenue arising from the weakening of the ringgit.

“Business sustainability is at stake. Jobs are also at stake, even for local workers when businesses find great difficulty in sustaining their operations.

“The government should look at business sustainability in totality, considering all relevant factors which would have an impact; and not in isolation,” FMM said in urging for a review of the decision and to implement it in phases when the economic situation improves.

Prime Minister Najib Abdul Razak had in his Budget 2016 review speech touched on the need to restructure the levy rate system as one way to increase government revenue.

Deputy Prime Minister Ahmad Zahid Hamidi, meanwhile, confirmed yesterday that the government's decision to restructure the levy rate system for foreign workers into two categories is expected to bring an extra income of RM2.5 billion.