Malaysia's SMEs against use of online service to renew foreign worker permits

Malaysia's SMEs against use of online service to renew foreign worker permits
Migrant workers cut grass by hand outside Tuanku Mizan Zainal Abidin Mosque in Putrajaya January 13, 2015.

PETALING JAYA - Small and medium-sized enterprises (SMEs) are against the mandatory renewal of work permits for foreign workers via the MyEG portal.

Associated Chinese Chambers of Commerce and Industry of Malaysia (ACCCIM) secretary-general Datuk Low Kian Chuan said many SMEs will face difficulties with the just-introduced system.

"Enabling the renewal of the work permits online is good but making it mandatory poses problems for SMEs.

"SMEs that are not proficient in online systems will suffer hardship," he said, explaining that "runners" would likely charge extra to help such SMEs, which range from coffeeshop operators to small-scale manufacturers, with the task.

He said it was important to understand that many SMEs were cost sensitive and that this would add to their expenses.

SMI Association of Malaysia deputy president Michael Kang agreed with Low, saying that about 70 per cent of SMEs were not IT (information technology) savvy.

He said that such SMEs should be given a choice, between going online or using an over-the-counter service.

According to Low, making online renewals of the permits mandatory was against the spirit of open competition and free enterprise.

"I hope the Malaysia Competition Commission will look into this," he said.

Datuk Nelson Kwok Teng Toong, founder and managing director of sweetcorn and snack food business Nelson's Franchise (M) Sdn Bhd, took issue with the RM38 (S$14.06) that MyEG charges for the renewal of each permit.

"It is on the high side," he said, citing how the banks only charge 10sen per online transaction to encourage businesses to use electronic banking.

"Both the high charge and the sudden removal of the counter service caught us by surprise," he said.

He said the Government has been asking businesses not to raise prices in view of the coming Goods and Services Tax.

"But now it introduces this new fee, making it hard for businesses to cope," Kwok said.

Kang said that the competitiveness of SMEs will be affected because the cost of doing business will go up with this new system.

Malaysian Plastics Manufacturers Association president Lim Kok Boon said he found the move peculiar.

He said that generally when an electronic system was introduced as part of a government move towards a paperless system or to boost efficiency, it was not made mandatory and the charge would be negligible.

The Immigration Department, he said, raised the processing fee for the work permits from RM50 to RM125 each late last year.

"SMEs should not have to pay the RM38 charged by MyEG. That should come from the processing fee collected (by Immigration)."

Lim said that would be fair because the department would need to employ less resources since part of the work was outsourced to MyEG.There is a misconception that business owners prefer to hire foreigners over Malaysians, according to him.

"It is unfair to keep raising the cost of hiring foreign workers when the unemployment rate here is low, at just 2.7 per cent," he said.

Michael Tan, director of niche electronic products manufacturer Itrimech Technology (M) Sdn Bhd, said he only has five foreign workers in his employ so the RM38 fee per worker was negligible.

"But when I expand, I will feel the pinch," he said.

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