adminKUALA LUMPUR — Human Resources Development Corporation (HRD Corp) continues to play a relevant and important role in meeting the nation’s current human capital development needs, the Ministry of Human Resources told Parliament.
Responding to a question from Petaling Jaya Member of Parliament Tuan Lee Chean Chung on whether HRD Corp remains aligned with present-day needs and whether the 1 per cent levy is too high for small and medium enterprises (SMEs), the Ministry said the levy mechanism enables structured training financing for employers to upskill, reskill and enhance the capabilities of their workforce.
The Ministry explained that HRD Corp supports workforce development in line with industry demands, digitalisation and Malaysia’s ongoing economic transition. It emphasised that the 1 per cent levy is not a tax, but a training fund that employers can reclaim for the purpose of employee training.
While acknowledging concerns from micro, small and medium enterprises (MSMEs) facing rising operational costs and current economic challenges, the Ministry said that for employers who actively utilise the levy for training, the contribution should be viewed as an investment in human capital development rather than a financial burden.
To ease the impact on MSMEs, the Ministry said it continues to enhance HRD Corp’s approach to be more SME-friendly. This includes simplifying claim procedures, expanding targeted training programmes for MSMEs, and introducing special initiatives to improve levy utilisation among small and medium employers.
In 2025, HRD Corp approved RM766.58 million in financial assistance for MSME employers to implement upskilling and reskilling programmes nationwide. A total of 806,165 training places were approved across the country during the same period, the Ministry said.
The Ministry added that it is continuously reviewing HRD Corp’s policies and governance framework to ensure the levy system delivers balanced benefits to employers, workers and the national economy without overburdening MSMEs.
It reaffirmed its commitment to ensuring HRD Corp remains relevant, effective and responsive to current labour market challenges and evolving industry needs.
