How would the EP levy differentiate foreign talent from cheap labour?

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The Proposed S$1,200 Monthly Levy on Employment Pass Holders Aims to Distinguish High-Caliber Foreign Talent from Lower-Wage Foreign Workers.

A proposal has been put forth to implement a S$1,200 monthly levy on Employment Pass (EP) holders. This measure is intended to create a distinction between genuinely high-salaried foreign professionals, referred to as "true foreign talents," and those perceived as "cheap labour" who may unfairly compete with local Singaporean workers. The proponent of this idea suggests that such a levy would help rebalance the foreign-local workforce ratio and address a perceived wage disadvantage for Singaporeans.
Differentiating True Foreign Talent from "Cheap Labour"

The core rationale behind the proposed S$1,200 monthly levy is to differentiate between foreign individuals who possess high-level skills and command significant salaries, and those who are employed at lower wage points and might be seen as direct competitors to local workers. The argument posits that a fixed levy would minimally impact high-earning professionals, allowing them to continue working in Singapore. Conversely, it would increase the cost for employers hiring foreign workers who are perceived as filling roles that could otherwise be taken by Singaporeans, thereby disincentivising the hiring of such "cheap labour."
Addressing Wage Disadvantage and Workforce Rebalancing

Proponents of the levy suggest it would help mitigate the wage disadvantage faced by Singaporean workers. Currently, employers are not required to contribute to the Central Provident Fund (CPF) for their foreign employees, a cost that is incurred for local workers. While levies already exist for work permit and S Pass holders, the absence of a similar levy for EP holders is seen by some as a loophole that employers exploit. The proposed levy aims to level the playing field by introducing a financial consideration for employing EP holders, thereby encouraging a more favourable balance between local and foreign employees.
Projected Revenue Generation

An estimated S$2.7 billion in annual revenue for the government could be generated if the proposed S$1,200 monthly levy on EP holders were implemented. This projected figure is based on the number of EP holders currently employed in Singapore. The revenue generated could potentially be channelled into initiatives aimed at supporting local workforce development or other government programmes.
Concerns Regarding Open Economy and Investor Signals

The suggestion of an EP levy has drawn criticism, with concerns raised that it could send a negative signal to foreign investors. Critics argue that imposing such a levy might suggest Singapore is moving away from its long-standing policy of maintaining an open economy and welcoming international talent. This approach, they contend, could undermine Singapore's status as an international financial hub by making it less attractive for companies to bring in the skilled personnel they need, potentially impacting economic growth and competitiveness.

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How would the EP levy differentiate foreign talent from cheap labour?

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