STA: Govt’s e-invoicing mandate an ‘inconsiderate policy’

KUCHING (Sept 30): The Sarawak Timber Association (STA) has regarded the government’s decision to mandate e-invoicing for all businesses in Malaysia as an “inconsiderate policy” that will disproportionately impact small and medium enterprises (SMEs), which form the backbone of the Malaysian economy.

Its chief executive officer Annie Ting said while the intention to modernise the tax system is understandable, this compulsory approach ignores the unique challenges faced by SMEs, which often lack the resources and expertise to implement complex technological solutions.

“The low threshold for e-invoicing registration, set at revenue above RM150,000, further entraps SMEs in a compliance dilemma. Implementing e-invoicing requires significant investments in new hardware, software, and training.

“For many SMEs, these expenses are simply out of reach, forcing them to either divert resources from core business activities or face the risk of non-compliance. Moreover, the transition to e-invoicing can be complex and time-consuming, disrupting operations and potentially leading to errors or delays,” she said in a media statement today.

Instead of imposing a mandatory requirement, Ting suggested that the government focus on providing incentives to encourage voluntary adoption of e-invoicing.

“This approach could include tax rebates or credits for SMEs that implement e-invoicing, financial assistance to help offset the costs of hardware, software and training as well as simplified compliance procedures for e-invoicing adopters.”

By offering these incentives, she believed that the government can create a more favourable environment for SMEs to embrace e-invoicing while minimising the financial burden on businesses.

“Unlike other countries such as Singapore, Australia and the United Kingdom, Malaysia’s approach is overly hasty, lacking consultations with businesses in Sarawak especially the SMEs.

“These nations have successfully promoted e-invoicing adoption through voluntary frameworks, providing businesses with the flexibility to choose the best solution for their needs.

“By following the lead of these countries, Malaysia can create a more supportive and sustainable business environment.”

Ting urged the government to reconsider this policy and make e-invoicing a voluntary choice for businesses with effective incentives and support.

“This approach would alleviate the financial burden on SMEs, promote innovation and ultimately contribute to a more vibrant Malaysian economy.”