KUALA LUMPUR: Micro SMEs heave a sigh of relief after getting a six-month respite as the government delays the implementation of the third phase of e-invoicing to Jan 1 next year from July 1 2025 originally.
Overall, the postponement was well received by industry players, with an economists saying the government is being pragmatic in its approach.
Financial management software developer and distributor Autocount Dotcom Bhd said the six-month extension for MSMEs to adopt e-invoicing allows them to better allocate resources, receive proper training and transition into the system at a steady pace.
Its managing director YT Choo said the spread-out approach ensures a smoother onboarding process and reduces potential compliance challenges.
"The fundamentals of e-invoicing remain unchanged. This is a regulatory requirement and businesses will eventually need to comply.
"What this delay does is provide businesses with the breathing space they need to fully understand and integrate e-invoicing into their operations without disruption," he said.
Choo added that with the extension, AutoCount can better support MSMEs by providing structured guidance, reducing the learning curve and ensuring they onboard seamlessly.
Small and Medium Enterprises Association of Malaysia (Samenta) lauded the postponement.
The association said it provides relief for 240,000 small and medium enterprises (SMEs) that were initially required to adopt e-invoicing by July 2025.
Additionally, Samenta urged the government to raise the exemption threshold for e-invoicing to RM300,000, in line with the official definition of micro-enterprises.
"While the delay is helpful, we must recognise that many small traders lack the financial resources, education and technical expertise to implement e-invoicing effectively.
"A significant number have already indicated that they may shut down by July 1, 2025, citing ageing business owners, shrinking profit margins, and the steep learning curve of e-invoicing," said Samenta national president Datuk William Ng.
The third phase of the full implementation of e-invoicing would have involved all types of businesses including MSMEs.
The implementation of e-invoicing began on Aug 1, 2024, for companies with annual sales exceeding RM100 million.
From Jan 1, 2025, the second phase of e-invoicing began for companies with annual sales between RM25 million and RM100 million.
The government has allowed an exemption of the e-invoice issuance to small businesses with annual sales below RM150,000.
Finance Minister II Datuk Seri Amir Hamzah Azizan said this will benefit over 700,000 small traders as they no longer need to issue e-invoices.
The government also continued its efforts to support MSMEs to onboard e-invoicing by postponing the implementation for MSMEs with annual sales between RM150,000 and RM500,000 to Jan 1 next year.
Bank Muamalat Malaysia Bhd chief economist Dr Mohd Afzanizam Abdul Rashid said the government is being pragmatic in its approach as each SMEs would have different capabilities to implement e-invoicing.
"What matters is that at the end of the day all business entities will embrace e-invoicing that will significantly improve the degree of transparency in day-to-day business dealings. This will pave the way for improving businesses experience in complying all the relevant taxes
"With a high degree of transparency, it will help the government to allocate financial assistance so that the SMEs will be able to scale up and be able to penetrate the global markets," he told Business Times.
He added that any further adjustments to e-invoicing should be based on the feedback from the ground.
"Certain adjustments may need to be introduced in order to encourage more businesses to shift into e-invoicing which should bring more benefits when their business dealings become more transparent.
"I supposed the engagement session with all businesses would be to be done more regularly so that the government can identify the pressure point and address them accordingly," he added.