by DayakDaily Team
KUCHING, March 28: While the implementation of e-Invoicing will contribute to improved tax compliance and digital transformation, the RM150,000 exemption threshold has been viewed as too low and capable of adding more financial and administrative burden on small businesses.
Sarawak United Peoples’ Party (SUPP) Stakan branch chairman Dato Sim Kiang Chiok highlighted this concern, stating that while e-Invoicing system could ease the workload for micro, small, and medium enterprises (MSMEs) in Sarawak and Sabah, the compliance requirements may impose extra costs and administrative burdens to their businesses.
“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 the additional compliance costs and responsibilities of e-Invoicing.
“Many of these small traders may not be well-equipped or educated enough to handle the digital invoicing system or even basic bookkeeping.
“The new compliance requirements could deter new entrepreneurship and small business startups, which would be detrimental to the economy,” he said in a statement.
Another major concern is the issue of persistent poor internet connectivity in rural areas, which could make it difficult for small businesses to comply with e-Invoicing requirements, increasing a risk to compliance for MSMEs operating in these regions.
He suggested that a more reasonable exemption threshold would be RM500,000 or even RM1 million, as businesses within this turnover range are more likely to have the technical capabilities and digital expertise to comply with the e-Invoicing requirements without significantly affecting their operations.
“In the long run, e-Invoicing will contribute to improved tax compliance and digital transformation for MSMEs, but it may not be as efficient as the previous GST regime. The GST system was simpler, more transparent while still ensuring tax transparency.
“The introduction of e-Invoicing could lead to higher operational costs for small businesses, without necessarily improving business efficiency.
“In fact, it may create an additional layer of complexity, especially for those businesses with limited technical knowledge. While it supports tax compliance and digital transformation, the long-term effects on MSME efficiency should be carefully considered to avoid unnecessary burdens,” Sim said. – DayakDaily
