Putrajaya’s move to enforce a 2% Employees Provident Fund (EPF) contribution from foreign workers will harm Sabah’s economy, says Sabah Progressive Party (SAPP) Information Chief Chin Vui Kai.

Chin cautioned that redirecting foreign workers’ wages into the EPF would weaken market circulation, impacting local businesses already struggling with rising costs.

“Instead of being spent in Sabah, the money will be locked in the capital market. This will slow down economic activity,” he said in a statement on Thursday.

He argued that the policy offers little benefit to foreign workers, who have short employment cycles, while increasing financial strain on businesses.

“Many businesses in Sabah have already shut down due to economic difficulties. Adding more costs will only make survival harder,” he added.

Chin also linked Sabah’s rising cost of living to policies set in Peninsular Malaysia, where rising minimum wages and higher supplier costs directly affect prices in the state.

“When fuel subsidies were removed in the Peninsula, Sabahans felt the pinch too. Now, with Tenaga Nasional Berhad’s electricity tariff set to rise, things will only get worse,” he warned.

He urged the federal government to reconsider the EPF policy and consult industry players to avoid worsening inflation. – February 6, 2025.