PETALING JAYA: The government’s decision to postpone mandatory e-invoicing for companies with annual sales between RM1 million and RM5 million has brought a sigh of relief to many small and medium enterprises, but experts caution that repeated delays could have wider implications.
The move, announced by Prime Minister Datuk Seri Anwar Ibrahim during his New Year’s address, extends the original mandatory rollout deadline of Jan 1, 2026, by a year. The prime minister said some companies were “still not ready because the cost of preparation is quite high”.
Putra Business School Associate Professor Dr Ida Yasin said the delay gives SMEs more breathing room to prepare, particularly for digital adoption.
“From the perspective of the SMEs, they are happy because they can have more time for preparation,” she said.
However, she noted that repeated postponements can erode trust in government planning.
“If we have repeated delays, sometimes the trust is reducing too,” Ida said, adding that careful initial planning could have avoided the need for multiple extensions.
Center for Market Education CEO Dr Carmelo Ferlito described the postponement as “good news” for SMEs, highlighting that compliance burdens currently outweigh the expected benefits of e-invoicing.
“A total exemption would have been better, but at least the postponement allows firms to balance compliance tasks with core business operations, which is what really matters,” he said.
On compliance costs, Ferlito emphasised indirect costs over direct financial outlays.
“The complexity of the system and the time spent on implementation and testing are significant,” he said, adding that smaller firms can now benefit from the experience of larger companies and professional consultants.
Ida acknowledged that while SMEs benefit from the delay, it slows the intended impact on government tax collection and digitalisation initiatives.
She noted the government has earmarked funds in Budget 2026 for SME digitalisation training and programmes.
“What is important is the implementation or the rollover of the plans.”
Both experts weighed in on the broader business implications.
Ferlito said prioritising operational smoothness for SMEs is more important than strict adherence to digitalisation goals or tax efficiency.
“I don’t see e-invoicing as a game changer in the overall fiscal strategy,” he said, adding that government revenue is unlikely to be significantly affected in the short term.
Ida said while the delays might not directly affect foreign investors’ perceptions, multiple postponements could have an indirect influence.
“I hope this is the only case where delays occur,” she said, pointing out that repeated deferments risk reducing confidence in government planning.
The government has also raised the threshold for service tax on rental services from RM1 million to RM1.5 million in total annual sales.
Ferlito described the move as “not too significant” but helpful.
Ida said any reduction in tax obligations is welcomed by SMEs, though she stressed the need for balance with government revenue needs to fund development and operations. “From the perspective of businesses, definitely, we love it. But from the government’s perspective, they need to collect taxes to run and develop the country.”
The economists agree that while SMEs gain immediate relief and preparation time, the government must ensure clear, consistent planning going forward.
“At the first place, we need to do good planning,” Ida said. “If it cannot be done, why announce it early only to delay it later?”
For now, the postponement gives SMEs a reprieve, allowing them to focus on operations while gradually building digital readiness. But both experts warned that the government’s next steps in e-invoicing and broader digital initiatives will be closely watched by businesses and investors alike.
