MICSEA welcomes e-invoicing exemption for businesses below RM500,000 annual income
KUCHING (June 7): The Malaysian Industrial, Commercial and Service Employers Association (MICSEA) welcomes the government's decision to exempt businesses with an annual income of RM500,000 and below from the e-invoicing requirements.
Its president YK Lai said this would give more time to micro, small and medium enterprises (MSMEs) to prepare for the implementation of the mandatory e-invoicing system for businesses.
He was delighted that the Inland Revenue Board of Malaysia (HASiL) understands the difficulties MSMEs face in implementing the e-invoicing system, especially due to limited time and insufficient tools in terms of management.
'This change is expected to bring immediate relief to more than 90,000 additional micro and small enterprises, bringing the total number of exempted businesses to approximately 790,000, representing Malaysia's smallest and most vulnerable traders,' he said in a statement yesterday.
Lai said MICSEA regarded this as a major step forward in reducing any management burden on MSMEs who may not have the digital infrastructure or resources to handle complicated invoicing requirements.
For businesses with an income of RM500,000 and above, he noted that HASiL continues to show leniency by extending the grace period.
According to him, businesses earning RM5 million to RM25 million in annual revenue must implement e-invoicing by July 1 this year.
'Businesses with RM1 million to RM5 million in annual revenue now have until Jan 1 next year, while businesses earning up to RM1 million annually will follow suit by July 1 next year.'
Even during the extended grace period, Lai believed that employers benefit from greater flexibility as they can continue using consolidated e-invoices for employee reimbursements, client billing, and vendor payments.
He said they are not required to issue individual invoices unless requested by the buyer and no enforcement action will be taken under Section 120 of the Income Tax Act 1967, as long as basic consolidated invoicing rules are followed.
'This is a timely and considerate move by the government, and MICSEA fully supports this decision especially as many employers are still recovering from post pandemic financial strain.
'These updated exemptions and deadlines allow more room for businesses to invest in the right tools to manage implementation of the system without the pressure of sudden compliance obligations,' he added. e-invoicing exempt lead MICSEA
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