Give us time to adjust, urge small businesses


PETALING JAYA: Not being tech savvy, increase in operation costs and potential disruptions to operations are among concerns raised by small businesses over the Inland Revenue Board’s (LHDN) plans to implement electronic invoicing (e-invoicing).

While some have called for the reintroduction of the Goods and Services Tax (GST) to replace a slew of incoming taxes, others have asked for more time and enforcement flexibility.

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SME Association of Malaysia secretary-general Chin Chee Seong said many of its members are concerned about increased costs, manpower needs, and potential disruptions to operations.

“The transition to e-invoicing poses significant challenges for micro-businesses, particularly traditional sole proprietor shops with little revenue.

“While some have considered shutting down for good, it is not the only option. With proper support and planning, including government aid, training programmes and gradual implementation, these businesses can smoothly transition to e-invoicing,” he said.

To address these concerns, Chin said the government should consider providing financial aid, tax benefits, training programmes, phased implementation, tech support and partnerships to ease the transition for SMEs (small and medium enterprises).

“In the meantime, LHDN must be patient with micro-SMEs, giving them more time and flexibility in enforcement.

“Given many traditional businesses still use manual bookkeeping, enhancing digital literacy is essential.

“LHDN should offer them training in basic computer skills and using e-invoicing software, along with financial aid for acquiring the necessary technology through affordable rental programmes,” he said.

Federation of Hawkers and Petty Traders Association Malaysia president Voon Chin Leong said most hawkers and petty traders are open to adopting e-invoicing if there is free software available.

“We are not against modernisation and understand the need to have it, but the implementation must not become a burden for traders with limited knowledge and tech-savviness,” he said in an interview recently.

Voon said e-invoicing poses a real challenge for older traders or those with small businesses and not familiar with technology.

“If they have to hire someone to handle it, that could add costs and increase their burden,” he added.

He also urged LHDN to be patient with micro-businesses, such as hawkers and petty traders, by allowing a longer rollout time and flexibility in enforcement.

SME Association of Malaysia (Samenta) national president Datuk William Ng said small traders including hawkers, barbers and other B2C (business-to-consumers) businesses with annual revenue under RM300,000 should be exempted from the e-invoicing requirement.

He said Samenta has conducted seven e-invoicing workshops for members and a round of walkthroughs by LHDN.

“We are grateful that LHDN has been proactive in guiding our members and SMEs in general.

“However, these workshops have reinforced the fact that e-invoicing is complex and could introduce additional costs and staff requirements for SMEs, potentially leading to numerous non-compliance issues.”

He urged the government to consider the industries’ call to bring back the GST at 4%.

“We agree that e-invoicing will reduce tax evasion and the grey economy, but low literacy and digitalisation levels among our SMEs would make the implementation problematic,” he added.

Malaysia-Singapore Coffeeshop Proprietors Association president Wong Teu Hoon said members have been worried about possible repercussions in the case of non-compliance.

“The intention is good, but it could burden food and beverage operators who typically handle only small transaction volumes,” he said.

Wong said small businesses or food and beverage operators that do not meet a specific revenue threshold should be exempted.

Malaysian Federation of Hawkers and Traders Association president Datuk Seri Rosli Sulaiman has called on the government to allow LHDN to link and pick up traders’ sales data from the In2Niaga app.

“The app was developed with the Entrepreneur Development and Cooperatives Ministry in 2021, enabling registered hawkers and petty traders to make secure and cashless transactions for their businesses.

“The app has all the traders’ sales data; if that can be linked to LHDN’s system, it will be easier for traders,” he said.

So far, the app has received some 2,000 registrations, he said, adding that the federation is promoting its adoption among members and traders.

Rosli said he also hoped that a presentation on the idea could be made with the relevant ministries soon.

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