News: Extend waiver on foreign worker levies, say subcontractors

Jul 29, 2020

Construction industry subcontractors have urged the government to extend the waiver of foreign worker levies as they face uncertainties over workers and payments.

Construction industry subcontractors have urged the government to extend the waiver of foreign worker levies as they cannot afford to resume paying the levies this month since most of their workers are still unable to work, reported TODAY.

“The original intention of the levy is to control the (number of) workers,” said Peh Ke Pin, Director of local construction company PQ Builders, which is among 120 subcontracting company that backed a 30 June letter by three other firms raising these concerns to the authorities.

“Now when our workers are no longer under our control and we are not having any productive work to generate revenue, why does the Ministry of Manpower (MOM) still have the basis to ask us to pay for levy?” he told TODAY.

Most of his 130 foreign workers have not returned to work, remaining in Tuas View Dormitory.

Ranging between $250 and $950 per worker per month, foreign worker levies have been waived since April due to COVID-19’s impact. However, payments are slated to resume as the authorities look to release workers quarantined in dormitories.

Minister of Manpower Josephine Teo revealed in a Facebook post on 25 June that she had received requests from employers to extend the levy waivers for a few more months, and wrote that she “will seriously consider their requests, and do what I can to help SMEs (small-and-medium enterprises) in particular get back on track”.

In a bid to help the construction sector cope with COVID-19’s impact, the Building and Construction Authority (BCA) on 27 June unveiled the $1.36 billion construction support package.

Under the package, construction firms will be eligible to a monthly foreign worker levy rebates of $90 per work permit holder starting from August 2020 until December 2021.

However, Peh and other contractors do not expect to receive income for several months, given the uncertainty on the timing of workers’ release and delays in payments from main contractors. As such, the $90 monthly rebate is rather small compared to a waiver of the levies, they said.

“What is $90 versus $900 or $600? I’d much rather the levies continue to be waived now when we have no income and once things are back on track, we don’t need that $90,” said Peh as quoted by Today.

Lawrence Wong, who co-chairs the COVID-19 multi-ministry taskforce, announced on 24 July that all foreign worker dormitories will be cleared of COVID-19 by 7 August, except for 17 standalone blocks in eight purpose-built dormitories serving as quarantine facilities.

Noting the uncertainty on when workers can resume work, Hiap Huat Demolition Contractors Director Nick Tay said: “At first we were told that all dorms would be cleared by the first half of July, then the second half of July and now it’s August. If things are so uncertain, they should extend the waivers and rebates until the point that the workers are cleared to work.”

“It’s not fair to put this pressure on us while there’s no movement, no income,” added Tay, whose 12 workers are still in a Seletar dormitory, namely PPT Lodge 1B.

In his Solidarity Budget speech on 6 April, Deputy Prime Minister Heng Swee Keat announced that the foreign worker levy for April would be waived and companies would receive a $750 rebate for that month for each work permit or S Pass holder.

The waiver and rebate were extended for another month, following the circuit breaker period’s four-week extension.

In his Fortitude Budget speech, Heng revealed that the levy rebates would be extended for two more months — waivers of 100% in June and 50% in July, with $750 rebate in June and $375 rebate in July.

Peh noted that while the government has “thrown up money to support some of the costs, most of it has been passed to our workers and staff”.

“So the company has been taking care of all the accommodation costs, vehicle maintenance and things like that.”

He revealed that his company have been in the negative by around $400,000 from April till June. “Now that we have to start paying the levies with no income, how will we survive?”

Setting out some of the problems facing subcontractors, the letter on 30 June was addressed to the BCA, the MOM and The Singapore Contractors Association.

To better understand their concern, BCA told TODAY that it held a meeting with the subcontractors on 17 July, with the discussion mainly focused “on the challenges of restarting work including financial issues”.

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Victor Kang, Digital Content Specialist at PropertyGuru, edited this story. To contact him about this or other stories, email victorkang@propertyguru.com.sg

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