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HRD Corp says it implemented measures to increase levy collection

KUALA LUMPUR: Human Resource Development Corporation (HRD Corp) has taken note of the findings in the Auditor General's Report and Public Accounts Committee (PAC).

Its chairman Datuk Abu Huraira Abu Yazid said it had implement several measures which helped increase levy collections over the years.

"For background, the audit process outlined in both reports was for the period of 2019 to 2023 which highlighted several areas that need improvements.

"In response to these findings, HRD Corp has implemented various measures," he said in a statement.

He said the training fund's levy collection and utilisation rates have improved significantly over the past few years, despite the initial impact of the Covid-19 pandemic.

"Notably, levy collections have seen a significant increase from RM475 million in 2020 to RM2,13 billion in 2023.

"The levy utilisation rate also improved, rising from 63 per cent in 2020 to 71 per cent in 2023.

"When including approved but unpaid levies, this rate would exceed 83 per cent."

He said the dip in 2020 and 2021 was attributed to the Covid-19 pandemic, during which employers affected by the movement control order were granted a moratorium on their levy payments.

Collections returned to normal rates by 2022.

Abu Huraira said HRD Corp's profit before tax also increased from RM25.8 million in 2020 to RM97.5 million in 2023.

"To address arrears issues, HRD Corp has strengthened its compliance and enforcement efforts, resulting in RM96.27 million in arrears collected in 2023, up from RM34.36 million in 2020, and RM52.34 million in 2021, and RM81.78 million in 2022."

He added that under the Human Resources Ministry's directive, HRD Corp has undergone a reformation process this year to enhance corporate governance.

He said some of the initiatives included the abolition of the Skills Passport project without any cost and loss to HRD Corp or the government.

"Other initiatives included separating the previous 'Risk and Audit Committee' into 'Risk Committee' and 'Audit Committee'; introducing a Strategic Initiatives Account separate from the levy trust account; tightening investment approval processes; and facilitating and encouraging greater levy utilisation by employers."

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