SMEs Fear e-Invoicing!

The Small and Medium Enterprises Association says larger businesses are telling vendors to comply with the new system or risk being delisted. Small and medium enterprises are concerned that the electronic invoicing (e-invoicing) system, the first phase of which will be implemented on Aug 1, will have a negative impact on them.

The chairman of the Small and Medium Enterprises Association (Samenta), said the government should bear in mind that the supply chain is interconnected. Larger businesses will expect SMEs to issue e-invoices to complete the continuous transaction control (CTC) loop. The CTC is a set of processes that enables law enforcement agencies to view in real time or near real time the financial data relating to business activities in their respective countries.

Source: https://en.wikipedia.org

Small traders with revenue under RM500,000 per year should be exempted from the e-invoicing regime. The elderly or less literate Malaysians who will not be able to cope

 with the process. The Government’s decision is to exempt SMEs with annual revenue of RM150,000 and below from the requirement.

 The blanket requirement is a burden to small traders even if they have the option to not issue e-invoices given that some customers may still want such invoices for various reasons. The preparedness of SMEs for the new regime is also a matter of concern.

A spokesman for a food and beverage company also expressed fears that vendors may be forced to cease operations. The government wants to improve the taxation system, but they need to consider that many entrepreneurs are ill-prepared.

 Putrajaya should implement e-invoicing in stages as many online entrepreneurs currently depend on e-commerce platforms to increase their income. For some, it is an added cost. The e-invoicing system is being rolled out gradually, starting with businesses with an annual turnover or revenue of more than RM100 million on Aug 1, 2024, and eventually extending to all businesses by July 1, 2025. This is another way of broadening the tax base and eliminating the “shadow” economy. But there are genuine concerns and costs. The Government should listen and phase-in its implementation over three years and focus on those with revenue of above RM500,000!

Reference:

SMEs fear e-invoicing will be painful for them, FMT Reporters, 12 July 2024