April 2022 President Message

BE FAIR TO THE CONSTRUCTION INDUSTRY

The issue of being double-taxed – which has been infamously described as the construction industry’s worst – has hurt contractors hardest and is still unresolved despite numerous appeals to the authorities. Master Builders Association Malaysia (MBAM) have spoken to the Construction Industry Development Board (CIDB), our custodian in the industry, which already imposes a levy on contractors amounting to 0.125% of the contract sum, to bring up the matter to the government.

CIDB uses the levy collected to fund its operations, and apart from executing its regulatory duties, expends much to carry out skills accreditation and training courses for construction workers. Our written appeal to the government had been sent too. There is no point to fret over the new ruling that the Human Resources Development (HRD) Corporation  have without compunction introduced in the midst of a raging Covid-19 pandemic. Contractors are now required to contribute a sum equivalent to 1% of their total staff salary to HRD Corp for use – not dissimilar to CIDB’s role – to provide upskilling and training courses to benefit construction staff. This HDR Corp’s levy ruling is effective from January 1, this year.

 While we appreciate the merits of the HRDF’s objective to equip and empower the workforce, we want the government to reply to our pertinent question which is why we should be double-taxed and not others to achieve its stated goal. To ensure compliance, a heavy fine of RM10,000 is imposed on errant contractors who may also face jail term not exceeding one year, if they failed to register with HRD Corp. Separately, they face double the penalties for not paying up the dues.

GIVE MORE PROJECTS TO LOCAL CONTRACTORS

I read with interest the many media write up on the recent announcement of the MRT3 projects which is given the green light to proceed by the Government. It is important that the project should be done by local contractors and Bumiputera contractors especially. Local contractors have invested a lot in capital expenditure for MRT2, thus for MRT3, we hope commencement can be expedited. The project can be packaged out to suit local contractor capacity and capability to ensure delivery. International contractors should not participate unless it is a very specialist job. It would also augur well for the MRT3 project if emphasis is made on Environment, Social and Corporate Governance (ESG), usage of Industrialised Building System (IBS) and digitalisation 4.0 which will spur compliance and usage of the technologies.

Tan Sri Sufri Hj Mhd Zin _{PSM, SSAP, DPTJ}
President, MBAM