Firms earning a total sales of RM1 million to RM5 million per annum will not be required to adopt e-invoicing for another year as the government recently agreed to postpone the mandatory exercise that was previously set to take effect on 1 January 2026.
Prime Minister Datuk Seri Anwar Ibrahim said at the monthly assembly of the Prime Minister’s Department today (5 January) that some companies were “still not ready because of the cost of operation (for e-invoicing) is quite high”, Free Malaysia Today reported.
According to the Inland Revenue Board (LHDN) last June, the finance ministry declared that e-invoicing for companies earning between RM1 million and RM5 million would be deferred from 1 July 2025 to 1 January 2026.
Last month, the government also decided to exempt businesses with annual revenue under RM1 million from e-invoicing.
Many business owners were unhappy about the e-invoicing policies constantly changing
Due to frequent changes on the mandatory e-invoicing policies, many business owners expressed annoyance and concern over the guidelines set by LHDN earlier, saying the multiple changes to thresholds, exemptions and enforcement dates were causing confusion.
Last month, the Malaysian Employers Federation remarked that the inconsistency meant that employers had little time to prepare and adopt the system.
Meanwhile, the public also voiced out their frustration over the government’s “flip flop” over its mandatory e-invoicing initiative as they questioned the fates of companies that have invested in the time and money spent on training staff as well as the system’s software and hardware, but find themselves falling below the threshold and become exempted.
The mandatory e-invoicing requires businesses to issue invoices in a standardised electronic format through LHDN’s MyInvois system.
Its main purpose is to improve tax compliance by enabling real-time invoice validation, reducing fraud, and ensuring accurate reporting of income and taxes. The system increases transparency by creating clear digital audit trails for business transactions.
It also supports Malaysia’s digitalisation agenda by reducing paperwork, automating accounting processes, and improving efficiency in invoicing, reporting, and audits.
Overall, e-invoicing helps strengthen government revenue collection, enhances business efficiency, and supports better economic monitoring and planning.
