MCA has welcomed the government’s decision to raise the mandatory e-Invoice exemption threshold from RM1 mil to RM3 mil in annual turnover, saying the move will provide relief to more than 1.1 million micro, small and medium enterprises (MSMEs) while urging Putrajaya to provide greater policy certainty instead of repeatedly revising regulations after industry pushback.
The exemption threshold determines which businesses are required to adopt the Inland Revenue Board’s (LHDN) e-Invoice system, a nationwide digital invoicing initiative introduced to improve tax compliance and accelerate business digitalisation.
The government recently raised the threshold following concerns from business groups that many smaller enterprises lacked the resources, technical expertise and time needed to comply.
MCA Economic and SMEs Affairs Committee chairman Datuk Lawrence Low, who is also the party’s vice-president, said the higher threshold would spare smaller businesses from immediate compliance costs at a time when they are already grappling with rising wages, utility bills and raw material prices.
However, he questioned why the exemption threshold had to be revised only after widespread concerns from industry.
“Small businesses should not become a testing ground for policies that are only refined after widespread industry distress,” Low noted, adding that every compliance change imposes real costs, particularly on traders without dedicated IT teams.
He said that if the objective of e-Invoicing is to accelerate digitalisation, implementation must be practical, fair and supportive rather than punitive.
Low urged the Finance Ministry and LHDN to issue clearer and simpler compliance guidance, particularly for businesses with more complex corporate structures, so that smaller traders linked to larger entities do not inadvertently breach the rules.
He also called for expanded digitalisation incentives, including direct grants, enhanced tax deductions and accessible free digital tools to reduce software costs for smaller businesses.
In addition, Low stressed that businesses should be given longer transition periods whenever major regulatory changes are introduced, alongside nationwide helpdesks and multilingual workshops to assist traditional traders and smaller enterprises with e-Invoice implementation.
He also urged the government to consult SMEs, chambers of commerce, trade associations and accounting professionals before rolling out future policy changes.
“Good policy is measured not by how quickly regulations are imposed, but by how effectively businesses can comply without being pushed into financial distress,” Low stated.
He added that MSMEs remain the backbone of local communities and that reforms should prioritise practical support that enables businesses to grow while adapting to digitalisation. ‒ Sept 3, 2026
Main image: Bernama
