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The Star
2 days ago
- Business
- The Star
E-invoicing on hold – but don't relax
PETALING JAYA: Small businesses earning RM500,000 and below annually in Malaysia can breathe a sigh of relief following the Inland Revenue Board (LHDN) granting them a full exemption from implementing e-invoicing. However, trade groups say that those still required to adopt the system must use the postponed deadlines wisely and ready themselves for the rollout. Associated Chinese Chambers of Commerce and Industry of Malaysia treasurer-general Datuk Koong Lin Loong said the exemptions are timely and a welcome relief. 'This is especially for micro-businesses like hawkers, petty traders and family-run businesses whose turnover is below RM500,000 annually,' he said, adding that the postponement for certain income brackets is also sufficient. 'Businesses will now have the time to familiarise themselves with the system. Upskill and find a way to work it out,' Koong said. On Thursday, the LHDN said taxpayers with an annual income or sales below RM500,000 are exempted from implementing the e-invoice system. It also said the implementation of e-invoicing for those earning between RM1mil and RM5mil has been postponed to Jan 1, 2026, while its implementation for those earning up to RM1mil is postponed to July 1, 2026. The e-invoicing initiative began in August 2024 for companies with an annual turnover or revenue of more than RM100mil. 'CLICK TO ENLARGE' The second phase started on Jan 1 this year for businesses with annual sales of between RM25mil and RM100mil. The third phase of the full implementation of e-invoicing was initially set to begin on July 1, involving all types of businesses. According to information from the LHDN's website, e-invoicing will enable near real-time validation and storage of transactions, catering to business-to-business, business-to-consumer and business-to-government transactions. Federation of Malaysian Business Associations vice-chairman Nivas Ragavan (pic) said many small businesses are still navigating digital transformation and the extension allows crucial breathing space. 'It allows small and medium enterprises (SMEs) to better understand compliance requirements, invest in suitable systems and train their staff without the pressure of a looming deadline. 'The revised timelines provide SMEs with a more realistic window for preparation,' he said. He said the additional time must be used effectively. 'It is important that the government, particularly the Inland Revenue Board and related agencies, work closely with SMEs to offer technical guidance and awareness programmes across the country,' he said. 'Dedicated grants or financial support schemes for micro and small and medium enterprises can be introduced to help them adopt the necessary systems and technologies for e-invoicing,' he added. Small and Medium Enterprises Association (Samenta) president Datuk William Ng said the exemption for those earning below RM500,000 annually will spare traders, hawkers and family-run shops from compliance burdens. 'The postponement of e-invoicing requirements for selected income brackets also gives SMEs the breathing space they need to prepare, upskill and adapt,' he said. Meanwhile, SME Association of Malaysia president Chin Chee Seong proposed for the e-invoicing exemption to also include those earning RM1mil annually and below. 'At least here, you can cover a bigger category of SMEs. If there is such a move, do inform us early,' he said, noting how some businesses, who are now exempted, had previously already prepared for the e-invoicing systems and features.
The Star
11-05-2025
- Business
- The Star
Experts: Young taxpayers watch out
PETALING JAYA: Young taxpayers often face challenges with tax filing, primarily due to confusion about the necessary forms and failing to keep track of personal tax reliefs, experts say. Associated Chinese Chambers of Commerce and Industry of Malaysia treasurer-general Datuk Koong Lin Loong said first-time taxpayers often face uncertainty regarding the appropriate tax return forms, making the process overwhelming. 'Additional common errors include filing tax returns without leveraging personal tax reliefs, overlooking passive and part-time income, and missing the submission deadline,' he said. ALSO READ: Newbies becoming lost in taxation Koong added that newcomers to tax filing should be well-informed about the personal tax reliefs they qualify for. These reliefs encompass medical expenses for parents, lifestyle purchases such as gadgets, young mother's relief for breastfeeding equipment and early education for young children. Moreover, there are specific reliefs for installing electric vehicle chargers at home. 'The younger generation should also understand the importance of saving and investing wisely to avoid financial pitfalls such as trading in listed companies without proper knowledge of their background and fundamentals. 'Financial planning should also encompass income protection through insurance policies,' he said, adding that accurate tax reporting would provide proof of income for future needs. Accounting firm KPMG's senior tax policy adviser, Dr Veerinderjeet Singh, pointed out that some taxpayers mistakenly claim ineligible personal reliefs. 'Common mistakes arise from a lack of clarity about eligibility, leading some to claim reliefs unjustifiably. 'Typical reliefs are for the Employees Provident Fund and Social Security Organisation contributions, insurance premiums and lifestyle expenses. 'But it's crucial to retain the necessary documentation or receipts, as the Inland Revenue Board may request them during a tax audit,' he said. Meanwhile, Renganathan Kannan, executive director at tax consulting firm Tratax Sdn Bhd, highlighted the significance of tax filing for young Malaysians involved in the gig economy. 'With a global trend of youth engagement in the gig economy, such as becoming Key Opinion Leaders or influencers, Malaysia is no exception. 'Whether this income is primary or supplementary, filing tax returns is essential,' he said. Renganathan advised determining whether the income is from a business source or casual work, as the latter offers limited capital allowance claims on expenses like phones, cameras or air conditioners for home studios. He cautioned about the necessity of timely tax filings to avoid penalties and complications, particularly for business and start-up owners seeking financing. 'Late submission penalties can adversely affect start-ups' profiles, making it challenging to build credibility with stakeholders, government agencies, investors and financial institutions,' he added.
