By DayakDaily Team
KUCHING, Jan 7: The federal government’s decision to defer the mandatory implementation of e-invoicing for companies with annual turnover between RM1 million and RM5 million reflects a clear understanding of the real operational constraints faced by micro, small and medium enterprises (MSMEs).
Welcoming the move, Sarawak Housing and Real Estate Developers’ Association (Sheda) advisor Dato Sim Kiang Chiok described the one-year deferment as a pragmatic and responsible decision, particularly at a time when businesses are navigating an increasingly complex regulatory landscape.
“In my personal view, the government’s decision to defer the mandatory implementation of e-invoicing for this group of companies is a sensible move. It recognises the genuine challenges MSMEs face in terms of capacity, cost and operational readiness,” he said in a statement on Tuesday (Jan 6).
While acknowledging that e-invoicing is an important step towards greater transparency, efficiency and digitalisation of Malaysia’s tax ecosystem, Sim stressed that many MSMEs are not yet equipped to absorb the immediate financial and operational impact of such an implementation.
He said companies would need to upgrade or replace accounting systems, engage external consultants, retrain existing staff or even hire additional personnel, all of which represent significant financial commitments for smaller firms operating on tight margins.
“For many MSMEs, these are not minor adjustments. They can affect cash flow and, ultimately, business sustainability,” he said.
Sim noted that the concern is particularly acute in the housing and building industry, where many are small contractors specialising in specific trades and technical skills. Such firms typically operate with lean administrative structures and do not have dedicated accounting or compliance teams.
“Imposing a complex digital reporting requirement too quickly may inadvertently divert their attention from core activities such as productivity, project delivery and workforce management,” he added.
He also pointed out that the deferment comes at a critical time, as MSMEs are already grappling with a growing list of compliance obligations. These include the self-assessment stamp duty system, the multi-tiered levy for foreign workers, proposed carbon tax measures, stamp duty on employment contracts, worker housing requirements under Section 446, the appointment of data protection officers under the Personal Data Protection Act, and safety officers under the Occupational Safety and Health Act.
“Individually, each policy may be justifiable, but collectively they place a heavy administrative and financial burden on small businesses,” he said.
Sim emphasised that the one-year deferment should be viewed not merely as a delay, but as a valuable transition period for meaningful engagement, targeted training and realistic implementation planning.
“Reforms will be more effective and sustainable when SMEs are adequately prepared, supported and given sufficient time to adapt, rather than being overwhelmed by multiple compliance pressures at the same time,” he said. — DayakDaily
