KUCHING: The decision to make foreign workers contribute to the Employees Provident Fund (EPF) could have a big impact on how much they help Malaysia’s economy. Right now, these workers don’t pay income tax, but they’re crucial to Malaysia.
Dr Dzul Hadzwan Husaini, an economist at Universiti Malaysia Sarawak (UNIMAS), explained that foreign workers do a lot for Malaysia. They help produce things and bring in money for the government through business taxes, and when they spend money here, it boosts our local economy.
Dzul believes that making it mandatory for foreign workers to contribute to the EPF would be a smart move. This would make up for the fact that they don’t pay income tax, ensuring their work helps the economy even more.
“By asking for these contributions, we can put more money into our financial markets. This new money could help our economy grow faster, making the most of what foreign workers bring,” he said.
However, he cautioned that this fresh regulation might significantly impact certain sectors, notably manufacturing and construction, which heavily depend on foreign labour to maintain competitive costs.
Dzul explained, “This changes the flow of money, especially in industries like manufacturing, which are super important for Malaysia. So, the government must think carefully about what will happen because of this rule.”
He added that keeping Malaysia competitive in these industries is key. Policies need to be balanced between getting the benefits for foreign workers and making sure that industries stay strong.
“Putting Malaysian businesses and the overall economy first is crucial for staying competitive in industries that rely so much on foreign workers,” he said.
Dzul viewed the transfer of EPF savings from one generation to the next as a positive step that could enhance individuals’ retirement security.
He said workers passing their EPF savings to family members would give them more control over their money.
He also pointed out that while it’s great for families to have this flexibility, the EPF needs to ensure that people don’t take out too much money too soon, which could hurt their retirement.
“It’s important for the EPF to carefully think about how this transfer would work. We need to ensure that people don’t mess with their retirement savings by taking out money they don’t need,” he said.
Dzul stressed the need for a careful balance to keep the EPF strong while also giving members more ways to support their families.
