Source: https://theedgemalaysia.com/node/716149
As the Aug 1 deadline approaches for the first batch of taxpayers — those with an annual turnover of RM100 million and above — to adopt e-invoicing for all their transactions, smaller businesses are bracing for their turn on Jan 1 and July 1 next year. However, concerns over this are already surfacing among companies and industry groups.
Last year, the Inland Revenue Board (IRB) unveiled a three-phase plan to make e-invoicing mandatory for all businesses by July 2025. This initiative requires all companies — from micro, small and medium enterprises (MSMEs) to large corporations — operating in the country to adopt e-invoicing and integrate into the IRB’s MyInvois system.
The e-invoicing system was introduced specifically to help the government achieve its 2024 tax collection target of RM185 billion by improving the efficiency of the country’s tax administration and compliance. It has been reported that the implementation of the system is projected to increase tax revenue contribution to between 14% and 15% of the country’s gross domestic product.
With this move, Malaysia will join 40 other countries in implementing e-invoicing, as part of its broader efforts to modernise and digitalise its economy.
“Larger companies with robust enterprise systems and processes as well as sufficient resources to refer to the relevant experts will be better equipped for the new implementation,” says Norazlam Norbi, CEO of Sumisaujana TCM Chemicals Sdn Bhd, an oil and gas provider.
Sumisaujana’s growth and focus on expanding with technological advancements have already led to the company taking the steps needed to prepare for the e-invoicing mandate, he adds.
“We invested in an enterprise resource planning (ERP) system, which successfully went live in 2023, just in time for us to focus on the e-invoicing implementation as the ERP software enables direct integration via [the IRB’s Application Programming Interface (API) to be a part of the MyInvois system].
“However, micro-businesses, especially the ones that practise manual processes with high amounts of transaction volume, may find it more challenging to adopt e-invoices in their system,” says Norazlam.
For Sumisaujana’s Norazlam, in working with its own deadline, his company had set up a special project team involving various departments to prepare for e-invoicing implementation.
“Some of our key focus areas include, but are not limited to, gathering the required data fields of e-invoices from our customers and suppliers in accordance with IRB’s e-invoicing guidelines, liaising with our ERP software providers on the system’s pilot testing on the IRB portal, consulting our tax agents on any areas that require clarifications or updating ourselves with the latest e-invoicing developments from the IRB, signing up for workshops to train and educate our staff with the necessary knowledge as well as engaging with our stakeholders on what needs to be in place once e-invoicing comes into effect,” says Norazlam.
Sumisaujana is finalising the internal data that is required for implementation, which includes preparation for the API system and the process of collating information from all stakeholders.
“One of the biggest challenges for us is the ambiguity in terms of the process of manual submissions into the MyInvois Portal via the Pilot Company Programme,” says Norazlam.
“Moving towards the implementation of e-invoicing, we foresee that this may affect the timeliness of our preparation, which includes providing ample training to our personnel, for both submission options — manually and [through the] system. This is especially because we mostly deal with foreign customers and foreign suppliers that practise the self-billed method,” he adds.
In order to properly prepare for the adoption of e-invoicing, Sumisaujana has had to invest quite heavily in additional personnel in areas such as IT, ERP, finance and supply chain in a very short period of time.
“We have also had to retrain a large number of our personnel to be literate in this new system. This obviously requires a big investment in a very compact timeline, which does put a strain on our growth plans,” says Norazlam.
