PETALING JAYA: Mandating all employers to provide a higher Employees Provident Fund (EPF) contribution rate will be detrimental, especially for small and medium enterprises (SMEs) that make up 97% of businesses, say business owners.
The Federation of Malaysian Manufacturers president Tan Sri Soh Thian Lai said the group was not in favour of the proposal to increase employers’ EPF contribution to boost workers’ retirement savings, especially during the current challenging economic period where the outlook was uncertain as global growth remained fragile.
“The industry is of the view that the focus of the government at this point should be on short-term and immediate initiatives for workers to have more money in their pockets and to improve purchasing power. Under the current EPF schedule of contribution, the employer’s contribution is at 13% for those earning RM5,000 and below, and 12% for those earning above RM5,000.
“While the statutory contribution rates for employers are fixed, employers also have the discretion to contribute a higher percentage based on their respective human resource and talent retention strategies, where their contribution is tax-deductible up to 19% of the employee’s pay,” said Soh.
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