MATTA: Allow private sector to stop mandatory EPF contributions for the year

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KUALA LUMPUR (March 26): The Malaysian Association of Tour and Travel Agents (MATTA) is urging the government to allow the private sector to stop mandatory contributions to the Employees Provident Fund (EPF), the Human Resources Development Fund and other levies.

MATTA president Datuk Tan Kok Liang said EPF contributions by both employers and employees should be suspended from March 2020 until the end of the year to allow employers to better manage their cash flow and for workers to have more cash for living expenses.

“Secondly, the government should further assist tourism and related companies by absorbing 60% of staff salaries up to RM 4,000 per month for each staff for six months effective April to September 2020. For this month, we have an estimated 90% drop in revenue and we expect the revenue from April to May to be practically nil. This request may seem “unreasonable”, but we are now under extraordinary circumstances,” Tan said in a statement.

He added that if such assistance and stimulus are not forthcoming very soon, liquidity issues will force many existing small and medium enterprise (SMEs) tourism companies and facilities to cease operations, resulting in a large number of workers losing their jobs.

“The tourism industry employs more than 3.5 million people (23.5% of our nation’s total employment), representing nearly a quarter of all jobs in Malaysia. It is expected that two in five people or 40% of the people would lose jobs, consequently this will create a ripple effect to other sectors.

“The key point here is to protect jobs! Businesses cannot be expected to keep paying employees when there is little or no income — it’s either close shop or lose jobs. Neither is desirable and a win-win solution would be for the government to help both employer and employee by sharing the burden of paying wages”, Tan went on.

On Bank Negara Malaysia’s announcement to allow a moratorium on loan repayments for the next six months, Tan said MATTA welcomes the move. However, he said banks should take a more responsible approach and go beyond their call of duty by allowing waivers to be made on the interest that is accrued and compounded on conventional loans during the moratorium period.

“How can the SMEs survive with the accumulated interest due and compounded and payable upon the expiry of the moratorium period? Compounding overdue interest is a double whammy for suffering businesses during this period,” he said.