Micro, small and medium-sized enterprises earning less than RM150,000 annually are not required to issue e-invoices currently.
Currently, micro, small and medium-sized enterprises (MSMEs) that are earning less than RM150,000 annually, numbering about 700,000, are not required to issue e-invoices.
In a statement, the Small and Medium Enterprises Association of Malaysia (Samenta) said increasing the exemption to MSMEs earning less than RM300,000 annually would be in line with the official definition of micro-enterprises.
Samenta president William Ng noted that many small traders lack the financial resources, education, and technical expertise to implement e-invoicing effectively.
He also said a significant number of MSMEs have indicated that they may shut down by July 1, citing ageing business owners, shrinking profit margins, and the steep learning curve for e-invoicing.
“Some SMEs within the supply chains of larger corporations have voluntarily adopted e-invoicing ahead of schedule,” he said.
“Given this, we propose revisiting the threshold in 2028, when the e-invoicing system is more established and transition costs are lower and more manageable.”
Ng said increasing the threshold would exempt an additional 70,000 MSMEs, bringing the total number exempted to 770,000.
Earlier today, finance minister II Amir Hamzah Azizan said the government has agreed to extend the implementation of e-invoicing for MSMEs with annual sales of between RM150,000 and RM500,000 by six months to Jan 1, 2026.
He told the Dewan Rakyat this six-month transition period will help prepare these businesses for the e-invoicing system and benefit more than 240,000 SMEs.
Ng said Samenta has seen a surge in SMEs seeking technical assistance and training on e-invoicing since January.
“With this extended timeline, we can better support SMEs in navigating the transition,” he said.
The e-invoicing system had been rolled out gradually from Aug 1 last year, starting with businesses with an annual turnover or revenue of more than RM100 million.
The second phase for businesses with turnovers exceeding RM25 million began on Jan 1 this year.
The third phase will begin on July 1 involving all types of businesses, including MSMEs.
Bernama reported that a total of 25,173 companies have used the e-invoicing system since it was started, resulting in 181.3 million e-invoices being issued.
Source Credited: https://www.freemalaysiatoday.com/category/nation/2025/02/20/group-urges-govt-to-raise-e-invoicing-exemption-threshold-for-msmes
