Taxing times

The hotly contested tax on the hiring of non-resident employees has taken effect, but domestic workers are exempt As of last month, employers who want to hire a non-resident employee will have to pay MOP200 per month, or risk a fine of between MOP300 to MOP1000. Domestic servants are exempt and the manufacturing sector will benefit from a 50 percent discount. Executive Council spokesperson Leong Heng Teng said the administrative regulations pertaining to the regulation of the law on hiring non-resident workers will be more lenient towards domestic servants and the manufacturing sector. The hiring of non-residents to do domestic work frees up local workers, cutting back on demand for the services of non-resident workers, and thereby contributing to the development of the local labour market, said Leong. Provides permit The MOP200 monthly payment – which will go into the social security fund – does not entitle the employee to fixed residence status, but rather provides him/her with a permit to stay while the employment contract is in effect. The move also stipulates a 50 percent tax reduction for employers of non-resident workers in the manufacturing industry as a way of supporting the sector. The imposition of the tax has been hotly contested by migrant workers. More money An Executive Council spokesperson said an increase to the maximum amount of the Credit Guarantee Plan for Small and Medium Enterprises, from the present MOP200 million to MOP500 million will be proposed. The spokesman said this was because “having assessed the impact of the global financial crisis on the local economy, the amount previously awarded is already depleted and it’s still necessary to support the local companies”. The increase raises the ceiling on the total amount of guarantees given by the government to loans granted by banking institutions, from MOP300 million to MOP600 million. The objective is to alleviate the financial difficulties of small and medium enterprises with an injection of capital. “Small and medium enterprises still need the support and assistance of the Macau SAR Government within a certain time frame in the future,” said Leong. Subsidy to continue The Executive Council said the additional subsidy payable to employees who have a quarterly income of less than MOP12,000 will continue. The assigned value is equal to last year’s; a maximum of MOP12,000 per year. Recipients must work 152 hours monthly for most general sectors, while industrial workers in textiles, clothing and leather need to work 128 hours per month to apply for extra income. Other conditions include: being 40 years of age; a permanent resident; and registered in the Social Security Fund. Last year, 9,000 requests for the supplementary subsidy were approved, costing the public coffers a total of MOP32 million.