KUALA LUMPUR: MSMEs earning under RM150,000 annually are exempt from issuing e-invoices, according to Finance Minister II Datuk Seri Amir Hamzah Azizan. "Currently, traders with annual sales below RM150,000 do not have to issue e-invoices.

Nonetheless, the government encourages small traders to participate in the e-invoicing initiative to promote business digitalization," Amir Hamzah stated during Question Time in Parliament on Tuesday (July 2). He noted the challenges MSMEs face in e-invoicing, such as increased operating costs, IT system upgrades, and limited knowledge.

Therefore, the government allows MSMEs to issue consolidated e-invoices, digital receipts summarizing monthly sales transactions. "These e-invoices need to be submitted to the Inland Revenue Board (LHDN) within the first seven days of the month," he added. The MyInvois portal is available for MSMEs to use at no extra cost.

Furthermore, tax incentives are offered to those who develop their systems or use a solutions provider, including a reduction in the capital allowance claim period from four to three years for devices and software purchases starting in the 2024 assessment year. "A tax break of up to RM50,000 per assessment year will be available for consultation fees from 2024 to 2027," he said.

The government will ensure a smooth transition to e-invoicing for all companies, including MSMEs, through an "educate and correct" approach. From August 1, taxpayers with annual turnovers over RM100 million are required to implement e-invoicing. Businesses with revenues between RM25 million and RM100 million must adopt it by January 1 next year. By July 1 next year, all other businesses, including SMEs, hawkers, and traders, must implement e-invoicing.