Just yesterday (5th December), it was announced by the chairman of the National Higher Education Fund Corporation (PTPTN), Wan Saiful Wan Jan, that borrowers earning RM2,000 and above will no longer need to manually repay their debts as the amount will be automatically deducted from their salaries.
Now, in light of this announcement, Malaysian Trades Union Congress (MTUC) president Abdul Halim Mansor told the Malay Mail that PTPTN would need the consent of borrowers and their employers before deducting their salaries. He added that there should be a black-and-white agreement that borrowers must sign to authorise PTPTN or a bank to deduct their salaries.
This is stipulated in the Employment Act 1955, and according to Abdul Halim, this act also ensures deductions made for any reason cannot exceed more than 50 per cent of an employee’s basic salary.
However, the MTUC president dismissed any attempts to emulate LHDN’s tax deduction system as they have their own legislation which enables them to deduct more from workers’ salaries. He was quoted by the daily as saying,
“In their case, it is a necessity since citizens have to pay income tax. But for PTPTN, it has no analogous legislation, and therefore must respect the Act in this instance.”
“Assuming PTPTN goes ahead with this, I can foresee several issues cropping up, such as the employers facing problems when making the deductions since salary payments are computerised nowadays.”
Abdul Halim also called the announcement of this new system premature, adding that PTPTN should provide a deduction schedule to employers that states when an employee’s deduction starts and ends.
“For them to announce it now before any agreement has been made between all the parties involved is rather premature. I am unsure what PTPTN would be able to do if it comes across any worker or employer who simply disagrees to the deductions.”
Want to know more about how this new loan repayment system will work and how much will be deducted depending on borrowers’ salaries? Check out the article below!
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