CABINET DEFERS LEVY HIKE ON FOREIGN WORKERS

KUALA LUMPUR, May 2 (Bernama) -- The Cabinet has decided to defer
temporarily the implementation of the foreign worker levy hike, Human Resource
Minister Dr. S.Subramaniam said Friday.

He said the Cabinet made the decision at its last weekly meeting after
considering requests by the employers, especially restaurant owners who felt
the hike would be and added burden.

"The Cabinet felt that it was not the right time to implement the levy hike
on foreign workers due to the uncertain economic situation," he told
reporters at Angkasapuri (the building that housed the national radio and
television stations) here.

Dr. Subramaniam said he raised the matter at last Wednesday's Cabinet
meeting after gathering feedback from the employers and industry stakeholders
recently.

"With this decision, the implementation of the doubling of levy payment for
foreign workers will be deferred temporarily until the economy improves," he
said.

The Minister said once the country's economy had improved, the Cabinet would
announce the mechanism for the implementation of the hike.

It was reported that more than 375,000 foreign and local workers in 25,000
Indian, Muslim and Chinese food outlets risked losing their jobs if the foreign
worker levy payment was doubled as proposed in the mini-budget.

The mini budget tabled in Parliament recently, provided for the doubling of
the foreign workers levy, except for those in the construction, plantation and
domestic maid sectors.

Malaysian Muslim Restaurant Owners Association (Presma) president
Jamarulkhan Kadir was quoted as saying that many restaurants found it difficult
to sustain their businesses even without the annual levy per worker being
increased from RM1,800 to RM3,600.

He was reported to have said that on top of the levy, the owners also had to
pay for medical fees (RM200), visa charges (RM160) and insurance (RM100).

Malaysian Indian Restaurant Owners Association (Primas) president R.
Ramalingam Pillai had also urged the government to review the levy for the
service sector and cancel it in view of the looming recession.

Ramalingam claimed that business across the board had also shrunk 30% in the
past six months following the economic slowdown sparked by the global financial
crisis. (US$1=RM3.60)
-- BERNAMA