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Review on foreign worker levy and religious tax
Published on: Thursday, January 12, 2017

Putra Jaya: The Cabinet has agreed to postpone to next year, the implementation of levy payment on foreign workers by employers, which will be enforced under the Employer Mandatory Commitment (EMC).

Transport Minister Datuk Seri Liow Tiong Lai said the Cabinet on Wednesday had also agreed to look into a proper ecosystem, aimed at providing convenience to industries in hiring foreign workers, and to ensure the country's economic growth.

He said the decision was made after a presentation by Minister in the Prime Minister's Department Datuk Paul Low who gave the overall picture pertaining to the EMC.

"It is not just on levy, but on the rights of the employer to have direct access towards the workers, rather than going through a middle man, how to cut down bureaucracy procedures and how to have fast employment of foreign workers.

"At the meeting, we also voiced out the need to regulate employment of foreign workers and ensure it can support our economic growth, without giving problem to our social issues," he told reporters here Wednesday.

On Dec 31, Deputy Prime Minister Datuk Seri Dr Ahmad Zahid Hamidi, who is also Home Minister, had announced employers would be responsible for paying the levy of their foreign workers which would be enforced under the EMC.

Under the scheme, the employers would be disallowed from deducting the levy from the wages of their workers.

On Tuesday, construction industry players wanted the EMC to be scrapped as it did not benefit the country.

Liow said Prime Minister Datuk Seri Najib Tun Razak had agreed to look into these matter personally and would coordinate with the Home Ministry and Human Resources Ministry to "take care of whatever hiccups" to resolve the issue.

"The Cabinet is clear that our foreign worker policy must be vibrant and able to solve the present shortage of foreign workers in the country," he said, adding the Cabinet Committee on Foreign Workers would meet soon.

Earlier, the Finance Ministry said it will issue a tax exemption order for religious institutions following the confusion arising from the amendment to paragraph 13 (1) Table 6 of the Income Tax Act 1967.

Second Finance Minister Datuk Johari Abdul Ghani said the order was to exempt all types of income of religious institutions registered under the Registrar of Societies or under any written laws regulating the institutions, from tax.

"The order will be issued very soon," Johari said in a statement.

He said the order, which to be issued under Section 127 of the Income Tax Act 1967 was also aimed at making clear the latest status of the religious institutions after the amendment took affect.

Johari said the decision was made after his meeting with representatives of the religious institutions yesterday, which was also attended by the Inland Revenue Board chief executive officer Datuk Sabin Samitah.

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