KUALA LUMPUR: Small and medium enterprises (SMEs) that adopted e-invoicing early have largely done so to take advantage of free applications and government support, says the Finance Ministry.
“The government believes this voluntary participation is driven by benefits from free applications such as the MyInvois portal and MyInvois e-POS, as well as training and guidance provided by the Inland Revenue Board (LHDN). These initiatives have helped businesses address financial challenges and acquire the necessary technical skills,” the ministry said in a written reply.
It was responding to Datuk Seri Dr Wee Ka Siong (BN–Ayer Hitam), who had asked whether Putrajaya would assist or provide relief to SMEs that had already incurred sunk costs to comply with e-invoicing but were later exempted, following the last-minute decision to raise the e-invoice threshold from RM500,000 to RM1mil in annual sales.
The ministry said e-invoicing has been rolled out in phases according to companies’ annual sales to allow sufficient preparation time.
Phase 1 began on Aug 1, 2024, for companies with annual sales exceeding RM100mil, while Phase 4, which started on Jan 1, 2026, is the final phase and covers companies with annual sales of up to RM5mil.
Originally, companies with annual sales of RM1mil were scheduled to come under Phase 5 from July 1, 2026.
However, following the Prime Minister’s announcement on Dec 5, 2025, to raise the exemption threshold for e-invoicing from RM500,000 to RM1mil, Phase 5 was scrapped and businesses in that category are no longer required to implement e-invoices.
Since e-invoicing was introduced on Aug 1, 2024, a total of 203,949 taxpayers have issued more than one billion e-invoices, the ministry said.
“This reflects strong acceptance among taxpayers, including SMEs, of e-invoicing as a key measure to digitalise business operations and ensure that transactions are recorded and stored in a more organised manner for both sellers and buyers,” it added.
For Phase 4, the government has provided a 12-month transition period from Jan 1 to Dec 31, 2026, compared with six months in previous phases. During this period, businesses are allowed to issue consolidated e-invoices and no penalties will be imposed for any non-compliance that may occur.
The ministry acknowledged that some businesses with annual sales of RM1mil and below had implemented e-invoicing earlier on a voluntary basis.
Beyond free applications and LHDN support, it said tax incentives have also helped ease implementation costs for SMEs, including deductions for purchases of ICT equipment, computer software packages and consultancy fees related to e-invoicing.
