Malaysian businesses warn of 'economic fire' on labour cost surge

Kuala Lumpur

MALAYSIAN manufacturers warned the government of an "insurmountable economic fire" that threatens businesses and jobs after what it said was a sudden decision by authorities to double foreign worker levies.

The government will increase the annual levy it charges employers to hire overseas labour for manufacturing, construction and services sectors to RM2,500 (S$855) from RM1,250 effective Feb 1, Deputy Prime Minister Zahid Hamidi said on Sunday. In the plantations and agriculture industries, the rate will be RM1,500, he said. The new measures will increase government revenue by RM2.5 billion, he said.