E-invoice issues increase burden on local businesses

THE current implementation of the e-invoice (electronic invoicing) system has faced numerous problems and difficulties, causing stress and additional burden on businesses across the country.

MCA urges the government to seriously consider reinstating the Goods and Services Tax (GST) as a more comprehensive and stable solution.

Previously, GST and e-invoicing were designed to function as a complete and complementary package. However, the government has proceeded with the e-invoicing scheme while sidelining the reinstatement of GST.

This has resulted in a contradictory policy direction that leaves businesses confused and uncertain.

The government has repeatedly raised the implementation threshold for e-invoicing while continuously delaying enforcement dates, reflecting poor timeline management and policy inconsistency.

While the government claims to be listening to public feedback, these repeated changes have instead created new problems, disrupted market order and ultimately shifted additional costs onto businesses.

Furthermore, the implementation of e-invoicing imposes significant additional costs on businesses, including system upgrades, software purchases, and staff training expenses.

Rather than addressing these concerns directly, the government has chosen to postpone and revise policies repeatedly, which only masks deeper weaknesses in decision-making.

During these delays, some businesses have already paid for electronic invoicing software and invested in further staff training.

Others have paid deposits of up to RM3,000 and now face uncertainty over whether they must still pay the remaining RM6,000, creating serious confusion that has affected cash flow and business planning.

Policy inconsistency not only harms businesses but also impacts service providers supplying e-invoicing systems.

Due to the government’s shifting stance, many software vendors have suffered significant losses after making advance investments in systems, manpower and operations, only to see their plans disrupted by continued uncertainty.

The government must take a firm and decisive stance in resolving these issues. Reinstating GST remains the most direct, effective and long-term solution, as it addresses the root of the problem and avoids the repeated complications arising from piecemeal e-invoicing policies. Prime Minister Datuk Seri Anwar Ibrahim’s announcement that the e-invoicing requirement, originally scheduled to take effect on Jan 1 this year for businesses with an annual turnover of between RM1mil and RM5mil, will be postponed for another year is a relief for many.

However, this relief will only be temporary and does not resolve the underlying issue.

Based on previous adjustments, where the threshold was raised from RM200,000 to RM500,000, and later to RM1mil, the government should now seriously consider increasing it to RM1.5mil or higher.

Amid rising prices, persistent inflation and increasing operational and raw material costs, it is crucial for the government to align policy decisions with current economic realities.

Reasonable threshold adjustments are necessary to avoid placing further strain on small and medium enterprises.

Any tax or system reform must not be rushed without comprehensive supporting measures and a clear long-term direction.

Otherwise, local businesses and the rakyat will be the ones that continue to bear the cost of policy uncertainty.

DATUK IR. LAWRENCE LOW

MCA Economic and SMEs Affairs Committee chairman

MCA vice-president