STUDENTS and fresh graduates will have more job-placement opportunities with the announcement of tax incentives for companies which participate in internship programmes.
“Companies will be more willing to offer internship placements while the interns will get valuable hands-on experience and make themselves more employable,” said Malaysian Employers Federation (MEF) president Datuk Azman Shah Haron.
In his Budget 2012 speech, Datuk Seri Najib Tun Razak said companies would enjoy double tax deduction on allowances paid to those pursuing internship programmes with them.
The move, he said, was to encourage Government-private sector cooperation in strengthening the development of highly-skilled human capital.
Companies would also get double tax deduction for scholarships and expenses incurred while taking part in career fairs abroad.
However, Azman said the Budget should have included a reduction in income tax rates to help offset the rising cost of living.
He said that many other countries were reducing their income tax rates and Malaysia had one of the highest in the region.
The Prime Minister had also announced that the employers’ contribution to the Employees Provident Fund (EPF) would be increased from 12% to 13% for employees earning RM5,000 and below to benefit 5.3 million EPF contributors in the country.
To this, Azman said this would be an additional burden for employers.
Federation of Malaysian Manufacturers (FMM) president Tan Sri Mustafa Mansur said members were complaining over the EPF contribution hike which would affect workers earning RM5,000 and below.
“A one percentage point increase for 5.3 million contributors can result in an increase of RM1.5bil.
“Employers whose majority of workers earn less than RM5,000 will feel the pinch more although it is a good move for EPF’s investments,” he said.
Mustafa also lauded the Government’s move to establish funds for small and medium enterprises and to develop skilled human capital.