[Parliament View] #14: EPF third account withdrawal amount exceeded RM10 billion in less than half a year since its launch

What to watch in this issue of “Digital View” of Congress?

1. 3.86 million EPF members withdrew RM10.7 billion from their third account
2. There are 2.47 million foreign workers in our country, with manufacturing and construction accounting for nearly 60%
3. Taxes collected from low-priced goods from overseas amounted to RM370 million in the first nine months of this year

3.86 million EPF members withdrew RM10.7 billion from their third account

In a written reply in Parliament, the Ministry of Finance pointed out that as of September 30 this year, a total of 3.86 million Employees Provident Fund (EPF) members had withdrawn RM10.78 billion from their Flexible Account (commonly known as the third account), and the relevant number accounted for 29.4% of members aged 55 and below.

In other words, just over four months after the launch of the Flexi Account, withdrawals exceeded RM10 billion for the first time.

The authorities added that withdrawing funds through flexible accounts can alleviate members' cash flow pressure to a certain extent, especially when they are in urgent need of money.

The CPF launched a restructuring plan on May 11. In addition to adding a flexible account, the authorities also increased the contribution allocation ratio of the retirement account (commonly known as the first account) from the original 70% to 75%.

The Ministry of Finance said that with the increase in the contribution rate to retirement accounts by 5%, the overall amount deposited into retirement accounts increased by RM1.2 billion from June to September this year.

This means that the number of active members aged 55 or below who meet the basic deposit standards has increased from 2.41 million in June this year to 2.56 million in September.

There are 2.47 million foreign workers in Malaysia, but it is still less than the labor force of 15%

The Ministry of Human Resources disclosed in a written reply to the Congress that as of September 30 this year, there were 2,470,781 foreign workers in the country. Among them, there were 1,469,734 foreign workers engaged in the manufacturing and construction industries, or 59% of the total.

The authorities stressed that the number of foreign workers cannot exceed 15% of the national workforce, and jobs will only be opened to foreign workers when local labor cannot meet job vacancies.

According to the statistics bureau, as of September this year, the total workforce in Malaysia is 17.24 million, which means that 15% (or 2.59 million) of them can be foreign workers. Based on the current number of 2.47 million foreign workers, there are still vacancies of 120,000.

In order to reduce the reliance of local businesses on foreign workers, the authorities have taken a series of measures, including:

• Freeze applications for foreign worker quotas and give priority to hiring local employees.
• Promote Technical and Vocational Education and Training (TVET) programmes.
• Increase training funding from the Human Resources Development Fund (HRD Corp).
• Increase the minimum wage to RM1,700.

In addition, starting next year, all industries except plantation and agriculture will implement a multi-tiered head tax (MTLM), which will determine the head tax that employers should pay based on the number of foreign workers employed by the enterprise. At that time, employers who rely more on foreign workers may have to pay more for foreign workers.

Revenue from the multi-tiered levy on foreign workers will be used to enhance the skills of local employees, especially those from small and medium-sized enterprises.

Tax revenue from low-priced goods from overseas reached RM370 million in the first nine months of this year

How much has the government earned so far from the 10% Low-Priced Goods Tax (LVGT) that was levied this year?

The Ministry of Finance revealed in a written reply to Parliament that as of September 30 this year, the government has collected a total of RM370 million in taxes on low-priced overseas goods.

The authorities stressed that the main purpose of implementing taxes on low-priced overseas goods is not to generate a large amount of revenue, but to narrow the price gap between our goods and foreign goods, thereby benefiting our manufacturers.

According to the Customs Department’s definition, low-priced goods refer to goods that do not exceed RM500 and enter the country by sea, land or air, but do not include cigarettes, tobacco products, spirits, electronic cigarettes and preparations for smoking.

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Data and information collection, writing, and graphics: Zhang Huici and Chen Chenghui

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