KUALA LUMPUR: Malaysia entered the fourth phase of electronic invoicing (e-invoicing) rollout yesterday, marking another part of the government’s effort to strengthen tax administration while easing the compliance burden on small and medium enterprises (SMEs).
Introduced as a digital platform to streamline invoicing and improve tax compliance, e-invoicing requires businesses to generate and submit invoices electronically, enhancing reporting and tax collection efficiency while reducing leakage.
Under the current timeline, the government planned to implement the fifth phase on July 1, 2026, for businesses with an annual turnover of up to RM1mil, with those earning less than RM500,000 annually exempt.
However, on Dec 6, 2025, Prime Minister and Finance Minister Datuk Seri Anwar Ibrahim announced that the exemption threshold would be raised to RM1mil from RM500,000, meaning firms with annual revenue below RM1mil will not be required to comply with e-invoicing beginning this year.
The rollout of e-invoicing began on Aug 1, 2024, initially covering companies with annual sales above RM100mil.
As of Nov 4, 2025, the Inland Revenue Board of Malaysia (IRB) recorded more than 106,000 registered taxpayers and transactions exceeding RM675mil through the e-invoicing system, reflecting growing adoption across the business ecosystem.
Meanwhile, businesses with transactions exceeding RM10,000, as well as electricity and telecommunications services providers, will be required to issue individual e-invoices instead of consolidated ones from Jan 1, 2026.
Currently, seven industries are required to issue individual e-invoices: automotive (sales of motor vehicles), aviation (flight tickets and private charters), gold products and luxury goods, construction, wholesale and retail of construction materials, licensed betting and gaming activities, and payments to agents or distributors.
To recap, the Centre for Market Education’s chief executive officer, Dr Carmelo Ferlito, had stated that exempting companies with annual revenue below RM1mil from implementing e-invoicing will ease administrative pressure on SMEs and allow them to focus on their core business activities.
He said that the exemption would free up time and resources to focus on business rather than on questionable administrative compliance, giving SMEs more space to focus on strategy and growth before adopting digital tax tools. — Bernama
