Datuk Jonathan Chai
KUCHING (March 23): Allowing micro, small, and medium enterprises (MSMEs) in Sarawak and Sabah to issue consolidated e-Invoices is a significant step towards modernising tax compliance and promoting digital transformation, says Datuk Jonathan Chai.
The Associated Chinese Chambers of Commerce and Industry of Sarawak (ACCCIS) secretary-general said allowing them to consolidate invoices reduces the administrative burden for MSMEs, particularly those with limited resources.
“This approach streamlines the process and minimises the time spent on invoicing. Fewer invoices mean lower costs associated with generating, managing, and submitting invoices, which is particularly beneficial for smaller businesses.
“By consolidating transactions, businesses can better track their sales and revenue, aiding in financial planning and cash flow management.
“Furthermore, the move towards e-Invoicing pushes MSMEs to adopt digital tools can improve overall business efficiency and competitiveness,” he told The Borneo Post when contacted.
Last week, Deputy Finance Minister Lim Hui Ying introduced the initiative in Dewan Negara that allows MSMEs in East Malaysia to merge all monthly sales transactions into a single invoice before submission to the Inland Revenue Board (LHDN).
However, Chai noted that many MSMEs in East Malaysia may struggle with the transition due to limited technical expertise and infrastructure, particularly in rural areas with poor internet access.
He said while e-Invoicing reduces long-term costs, the initial investment in software, training, and system integration can be a hurdle.
“Businesses without robust accounting systems may also find maintaining accurate records challenging,” he added.
In stating this, he urged the government to provide subsidies for software, training programmes, and improved internet infrastructure in rural areas to ensure a smooth transition.
A phased rollout, starting with larger businesses before including smaller ones, could ease adaptation. Continuous dialogue between the government, businesses, and industry groups is crucial to addressing challenges and refining policies, he added.
Dato Sim Kiang Chiok
Meanwhile, Sarawak Housing and Real Estate Developers Association (Sheda) advisor Datuk Sim Kiang Chiok said the consolidated e-Invoicing approach would significantly ease the workload for MSMEs.
However, traders would still need to learn how to submit these monthly e-Invoices accurately. “While it offers benefits in terms of efficiency, the compliance requirements will add extra costs and administrative burden to their businesses.”
On a related note, Chai said the RM150,000 exemption threshold offers relief for very small businesses, allowing them to focus on operations without compliance burdens.
However, many small traders operating on thin margins may still struggle to comply. Raising the threshold could ease their financial strain, enabling them to reinvest resources into their businesses rather than compliance costs.
A higher threshold would also allow LHDN to focus on larger businesses with greater capacity to comply, he said.
Chai cautioned that a higher exemption could reduce tax contributions and slow digital adoption. Balancing regulatory efficiency with the realities of small traders in Sarawak and Sabah is crucial for fair and effective implementation.
Sim also argued that the RM150,000 exemption threshold is too low, equating to a turnover of about RM12,500 per month or approximately RM400 daily.
“This threshold would capture almost all small businesses, including petty traders, leaving them burdened with additional compliance costs and responsibilities.
Many of these small traders may not be well-equipped or educated enough to handle digital invoicing or even basic bookkeeping. The new compliance requirements could deter new entrepreneurs and small business startups, potentially harming the economy,” he said.
He suggested raising the exemption threshold to RM500,000 or even RM1,000,000, as businesses within this turnover range are more likely to have the technical capability and digital know-how to comply with e-Invoicing without significantly affecting their operations.
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