E-invoicing: Stop with the last-minute policy changes, Putrajaya told

KUCHING (Dec 8): The federal government needs to stop making last-minute policy changes and provide clearer long-term direction on e-invoicing, said Nicholas Wung.

The Sarawak United People’s Party (SUPP) Kuching Youth chief said Putrajaya’s latest decision to raise the e-invoice exemption threshold from RM500,000 to RM1 million—barely six months after it was first increased—has left many small and medium enterprises (SMEs) uncertain about their compliance obligations.

He said while the rationale for easing requirements on micro and small enterprises is understandable, the frequency of adjustments has become “genuinely disruptive”.

He pointed out that the exemption threshold had already been revised twice this year, from RM150,000 to RM500,000 under the Inland Revenue Board’s (IRB) June 5 guidelines, and now a proposed increase to RM1 million announced by the Prime Minister on Dec 6.

“Businesses need a clear timetable to budget, purchase systems and train staff,” he said in a statement.

“Verbal announcements must quickly be translated into formal guidelines and a unified line of communication; otherwise, confusion on the ground will only worsen.”

Wung stressed that the federal government should think long-term instead of “patching things after the fact”, noting that every shift in guidelines results in additional costs for companies trying to understand requirements or re-align earlier investments.

He added that the phased implementation approach, coupled with a six-month grace period for each revenue tier, was originally designed to ensure a smooth transition; yet, subsequent changes have undermined that objective.

Wung also voiced concern for businesses in the RM500,000 to RM1 million revenue band, which had already begun procurement of e-invoicing systems, staff training, and process redesign in preparation for the July 1, 2026 rollout announced in June this year.

“If the RM1 million exemption threshold is ultimately formalised, these businesses will no longer be compelled in the short term, meaning their early investments may become idle or require rescheduling.

“The government must address their situation to prevent them from becoming ‘collateral damage’ of policy reversals,” he said.

Wung proposed that Putrajaya introduce one-off technology grants, training subsidies, or tax-deductible compliance expenses for businesses that had already begun e-invoice preparations.

He also said the government should outline the long-term benefits of voluntary adoption, such as better reconciliation efficiency, invoice standardisation, and smoother refund processes.

This, he explained, will ease fears that early adopters had “invested in vain”.

On Dec 6, Prime Minister Datuk Seri Anwar Ibrahim announced the government would raise the e-invoice exemption threshold from RM500,000 to RM1 million beginning next year as part of efforts to ease the burden on SMEs.

Anwar said the decision was made after the government received direct feedback from small business owners over the cost of implementing the system.

As an immediate corrective measure, the Prime Minister announced that the federal government would increase the allocation for tax refunds from RM2 billion to RM4 billion this December to expedite outstanding payments, particularly for small businesses.