LETTER | Malaysian Employers Federation (MEF) president Syed Hussain Syed Husman is saying that the Social Protection Contributors Advisory Association Malaysia (SPCAAM) proposal to the government to make it mandatory for all employers to offer at least one month’s salary as festival aid would cause a huge burden for businesses still recovering from the Covid-19 pandemic.
Small and Medium Enterprises Association of Malaysia president William Ng has also echoed Syed Hussain’s warning, by saying that the proposal, if accepted, would put a financial strain on businesses, especially as they had seen reduced profit margins since the pandemic.
But is there any merit to their claims? Let us examine the facts. In 2022, the Inland Revenue Board recorded its largest direct tax collection at RM175.4bil, which is a 21.75 percent increase compared with 2021.
Its collection for the year 2023 was likely even higher, because according to the then Deputy Finance Minister II Steven Sim, by May 2023 itself, tax collection was already 20% higher compared with the same period in the year before.
According to IRB’s director of the CEO’s office, Ranjeet Kaur, corporate tax contributed RM97.94 billion, or 55 percent, of LHDN’s overall tax revenue for 2022. She also stated that the T20 group contributed 85%, or RM33.68 billion, of the personal income tax collected in 2022.
If business owners and corporations are still recovering from the covid-19 pandemic as Syed Hussain and Ng claim, how is it possible for IRB to make such a record haul?
The Malaysian economy grew by 8.7 percent in 2022. In 2021, it grew by 3.1 percent and in 2023, according to the Department of Statistics Malaysia, Malaysia most likely achieved GDP growth of four to five percent.
If every year, the economy is growing, how is the case that businesses and corporations are still struggling?
According to the Investment, Trade and Industry Ministry, Malaysia’s exports in January 2024 rose by more than 8.7 percent from a year earlier to RM122.43 billion (S$34.4 billion), which is more than the three percent growth estimated by experts. Overall, According to MIDF research, Malaysia's exports are expected to rebound and expand by 4.5 percent in 2024 and the list goes on.
If businesses and corporations are exporting more, why are they claiming that they are still suffering in the post-pandemic era? It is appropriate for MEF to cease impeding workers’ advancement, given that employees dedicate themselves tirelessly to the employer's success.
From the Indonesian example, we can see that it is not difficult for the government to ask business owners or the higher executives of a corporation, to have a sense of proportion and fairness, when evaluating the worth and value of their employees.
Malaysian employers must be mindful that all employees including the general manager in Indonesia receive a one-month salary and the government has made Festive Aid mandatory. Nevertheless, numerous Malaysian companies are eagerly investing in Indonesia.
If the government asks, the businesses and corporations will almost certainly see the light.
The only question is, is the government willing to speak to the businesses and corporations on behalf of at least the lower-income workers?
On behalf of millions of B40 and M40 workers, SPCAAM would like to appeal to Prime Minister Anwar Ibrahim to find it in his heart to speak to the business owners and the higher executives in the corporations and ask them to be reasonable and proportionate in their estimate of their value as well as the value of their lower-income employees.
J SOLOMON is SPCAAM president.
The views expressed here are those of the author/contributor and do not necessarily represent the views of Malaysiakini.
