AN MCA leader has urged the government to clarify the recent implementation of the e-Invoice initiative by the Inland Revenue Board (LHDN), saying the implementation has raised various concerns among the general public and SMEs.
MCA vice president Datuk Lim Ban Hong said while e-invoices serve as a new tax management tool which aims to simplify tax processes and increase transparency, the possibility of risks arising during the execution process cannot be denied.
“Many MSMEs and petty traders lack sufficient technical capabilities and resources to adapt to this change,” Lim said in a statement on Wednesday (April 17).
“They may need to invest significant time and funds to update their information systems to meet the requirements of e-invoices.
“This would heave a burden on business operations and potentially lead to closures or forced market exits for some micro businesses and petty traders.”
Lim further noted that e-invoices may cause the financial management costs of business to spike as businesses may need to hire more financial personnel to handle and manage large volumes of e-invoicing data.
“This will increase operational costs and may affect their profitability,” he added.
Lim also pointed out that since e-invoices involve a large volume of sensitive information such as customer and financial data, unauthorised access to and misuse of this information by hackers and scammers could cause serious losses to businesses and individuals.
He said the government should enhance training and support for businesses, such as providing training courses and financial subsidies to help them update their information technology systems and improve their ability to handle e-invoices.
“The government should also strengthen regulation of the security and tax data privacy such as establishing stricter data security standards and intensifying supervision of businesses to ensure that tax data is not subject to unauthorised access and abuse,” Lim remarked.
“Measures to reduce the financial management costs of businesses should also be taken, where the government can waive tax-related fees and provide subsidies for financial management software to help businesses lower their financial management costs.
“The government should further establish dedicated mechanisms, such as holding forums, conducting research activities, and setting up online opinion collection platforms, to regularly invite representatives from MSMEs and petty traders to participate in discussions, listen to their feedbacks and suggestions, formulate relevant support measures, and address practical issues in the implementation of e-invoices.”
LHDN’s e-Invoice initiative is among the government’s initiatives to improve efficiency, transparency and, tax and finance management control.
An e-invoice is a digital representation of transactions between seller and buyer, to replace the use of paper for electronic documents in PDF, JPEG or doc formats.
It contains the same essential information as traditional documents which includes buyer’s details, item description, quantity, taxes, price excluding taxes, and total amounts that record transaction data for daily business operations. – April 17, 2024
Main pic credit: The Star
