|MOM releases details on foreign worker levy changes|
|Thursday, 04 March 2010 13:53|
SINGAPORE: The Ministry of Manpower (MOM) has released details on the planned increases in S Pass and Work Permit worker levy rates announced in the 2010 Budget on Monday.
The key changes are the introduction of new tiers and an adjustment of the rates every six months.
The construction sector will see the most changes.
Singapore currently has 1.05 million foreign workers. Of these, 856,000 are Work Permit holders — with 245,000 in the construction industry.
Between July this year and July 2012, the sector will see a 25 per cent reduction in man—year entitlements — meaning the number of foreign workers employed according to project value.
In addition, come 1 July 2011, the government will phase out the unskilled Work Permit holders category in the construction industry and reclassify the remaining ones as "basic skilled".
The ministry will also introduce a new tier for "higher skilled" workers who have relevant experience.
With these refinements, the levy for each "higher skilled" worker will be increased. Come 2012, it will be S$200 — up from S$160 in July this year. For those holding basic skills, it will be S$300 in 2012.
Andrew Khng, president of Singapore Contractors Association, said: "There will be an impact on business costs. But if it is progressively done, the impact will be marginal for the first few months. Then later, we will have to ... modify our work methods.
"We should be looking at more mechanisation and more innovative ways of construction, which I think now is a wake—up call for those contractors who have not been pursuing this because of too much work in the last few years.
"The association will help members to grow in tandem with our call to move towards mechanisation and also to upgrade the skills of the manpower or foreign workers in Singapore."
In manufacturing, the the basic tier will also increase from S$160 in July this year to S$200 in July 2012. For those in the second tier category, the levy will rise from S$180 this year to S$300 in 2012.
Stephen Lee, president of Singapore National Employers’ Federation, said: "They worry that although it is only S$10 per step ... the sheer number they employ is very large, so this will add to the costs.
"Then some companies are a bit at a loss as to how they can increase productivity. So there is a job here for the tripartite partners to work together and work at industry level, especially for those which don’t have in—house capability, to hold their hands to increase productivity."
The ministry said the levy changes will be gradual over the next three years to give businesses time to adjust, and there will be no changes to the levy for foreign domestic workers.