Proposal of Multi-Tier Levy System

Multi-tier Levy System

The implementation of the multi-tier levy system for the employment of foreign workers has been postponed to January 1, 2022. Human Resources Minister Datuk Seri M Saravanan made the announcement after the cabinet meeting on Jun 2, 2021. Initially, the Multi-tier levy system  was scheduled to take effect on Jan 1, 2021. 

In fact, the idea of Multi-tier levy system was proposed on 2019. Here are the highlights. 

  1. The more foreign workers you hire, the more levy you pay. So, you will pay levy according to the levy rate tiers. Then, you will save levy as well if you hire more local to lower the foreign worker ratio in company. 
  2. Despite paying levy in lump sum, you can pay levy by monthly. Probably, this is a good news to all, especially for those company which practice Responsible Business Alliance (RBA)  because it will improve the  business cash flow. Despite that, its a better way to manage foreign workers discipline. 
  3. The scale of getting quota in hiring foreign workers will become more  flexible. Actually, It’s another good news to all, especially for those SME. Eventually, you can hire more foreign workers without limitation by the local ratio. 
  4. For construction sector, skilled worker levy is cheaper. To conduct the assessment,  we strongly believe the Akademi Binaan Malaysia (ABM) will be the authorized institute . As a matter of fact, construction workers are compulsory to take the assessment at ABM institute for now. 

However, the above statements are not finalized till the next official announcement. Plus, the latest Multi-tier levy system may different from the proposal on 2019. For further info, click here to download. 

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