SAMENTA: Gov’t must reject outright call to hike EPF contributions

THE Small and Medium Enterprises Association of Malaysia (SAMENTA) wants the Cabinet to reject what it deemed as “opportunistic demand by that fringe workers group” for a hike in Employees Provident Fund (EPF) contribution and instead focus on creating higher value jobs where Malaysians workers can be more productive.

Moreover, the SME group views with concern that a hike of the employers’ portion to 20% at a juncture when the post-pandemic economic recovery remains fragile as not only counter-productive but will do more harm than helping working Malaysians.

“While the economy has roughly recovered to 2019 level, SMEs continue to trail behind larger firms in share of growth,” claimed SAMENTA president Datuk William Ng in a media statement.

“The latest available data for 2021, for example, showed that SMEs only grew by 1% versus 4.4% for larger firms. This uneven recovery is further compounded by rising costs which hit our SMEs as severely as they do consumers in general.”

Datuk William Ng

To re-cap, Prime Minister Datuk Seri Anwar Ibrahim who launched the Labour Day celebration in Putrajaya on Monday (May 1) has said that calls by workers for employers to contribute 20% towards their EPF will be discussed.

Anwar who is also the Finance Minister was asked to comment on the Union Network International-Malaysia Labour Centre’s (UNI-MLC) 12-point request which included raising employers’ EPF contributions and the retirement age.

Presently, employees contribute 11% of their monthly salary to the EPF while employers contribute another 12% or 13% of the salary depending on the statutory contribution rate.

“We must remember that our SMEs have had to endure two rounds of increment in minimum wages since 2020 despite COVID-19 despite a severe dip in our GDP (gross domestic product) and despite a drop in labour productivity,” contended Ng.

“We were also forced to adopt higher employee benefits, including longer maternity leaves and lower threshold for overtime payment. We are still waiting for an answer from the government to our plea for these increased costs to be subsidised as practised in Singapore and the UK.”

SAMENTA, according to Ng, also rejected the idea of a ‘stepped’ increase in employers’ EPF contribution.

“A responsible government cannot keep being held hostage by opportunistic groups, and our businesses must not partake in this ‘give and take’ approach every time a nonsensical proposal is fielded,” he lamented. – May 3, 2023

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