KUALA LUMPUR (July 31): The government will impose the multi-tier levy mechanism (MTLM) on foreign workers in 2026, said the 13th Malaysia Plan (13MP) report, one year later from its initial implementation date of 2025.

Meanwhile, the government is also planning to tighten the requirement for temporary work permit, which includes requirements to change sector and employer; restriction to doing business; and shorter permit period, the report said. 

This as the government eyes to reduce the number of foreign workers in the country to 10% of the workforce by 2030. This is from about 15% currently, achieved through the existing cap on foreign worker employment at 2.5 million.

It is expected to decline further to 5% of total workforce by 2035, the report said.

Additional collection from MTLM will be put into a trust fund that will be created to encourage automation and mechanisation, said the report.

“The step (MTLM roll-out) will open up opportunities for employment and talent improvement for Malaysians, and [they] will subsequently achieve better wages,” the report said.

“The well-being and protection of workers will also be enhanced through improvements in the management of retirement savings and the strengthening of an employment disaster protection scheme,” it added.

In the Public Accounts Committee (PAC) report published on July 28, the Home Ministry said it was considering raising the foreign worker levy by a minimum of RM300-RM500 each. This as it sees the levy as one of several means to cover the cost incurred by the government for foreign worker management, alongside increases in visa and processing fees.

Aside from supporting the government’s foreign worker management costs, the MTLM’s rates are also meant to discourage foreign worker hiring in the country.

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