KUALA LUMPUR: The recruitment of expatriates has contributed to the country's revenue, but several weaknesses need to be given attention including the unsatisfactory tax collection management involving the expatriates from 2017 to 2020.

According to the Auditor-General's Report (LKAN) 2020 Series 1 released today, a total of 15,293 expatriates did not have tax files, 7,174 expatriates have arrears in taxes amounting to RM65.90 million.

"There are expatriates who have tax arrears for over nine years, which is a leakage of revenue to the government," the report said.

To overcome the weaknesses, the report recommended the Inland Revenue Board (IRB) to enhance cooperation with the Immigration Department (JIM) to improve the efficiency of tax collection management involving the expatriates.

Expatriates are foreign nationals who are qualified to fill key, executive or non-executive positions in any local or international organisation in Malaysia using either Employment Pass, Professional Visit Pass-Specialist and Residence Pass-Talent.

The report said non-compliance with the registration requirements of companies/organisations under the jurisdiction of seven approving agencies in the Expatriate Services Division (ESD) System has resulted in the centralisation of company/organisation information in one parent system has not been achieved and may result in JIM unable to conduct monitoring efficiently and comprehensively.

"A total of 7,987 Employment Passes were issued from 2017 and 2019 with the JKPD approval reference, even though there was an instruction to abolish JKPD and replace it with the Expatriate Committee.

"A total of 4,363 Employment Passes (Category III) for the construction, manufacturing and mining sectors were approved without documents confirming that the expatriates had undergone medical examinations," it said.

The report also concluded that the country's real need for the employment of expatriates from 2017 to 2020 could not be determined because the government did not make any projection on the need for highly skilled human capital.

To overcome the weaknesses highlighted and to ensure that no recurrence in the future, the report recommended that the Home Ministry (KDN), Human Resource Ministry (KSM) and TalentCorp need to conduct a comprehensive study to evaluate the effectiveness of expatriate recruitment in contributing towards strengthening of highly skilled human capital among locals.

Apart from that, the KDN, JIM and TalentCorp need to ensure a centralised company registration and integration of the approving agency system with the ESD System are expedited so that a comprehensive database should be established to facilitate JIM to carry out monitoring activities efficiently and effectively.

The report also recommended that the Joint Working Committee-Expatriate needs to strengthen governance and monitoring of the implementation of policies related to the recruitment of expatriates, while the KDN needs to review the health screening requirements for expatriates to curb the risk of transmission of infectious diseases.

-- BERNAMA