Mohd Nizom said the application of e-invoicing would require businesses to maintain a comprehensive record of their transactions and completely report it to the IRB.
KUALA LUMPUR: The implementation of the electronic invoicing system (e-invoicing) will bode well should the government opt to reinstate the goods and services tax (GST), and simultaneously, assist it in achieving its 2024 tax collection target of RM18bil, says Inland Revenue Board (IRB) chief executive officer Datuk Seri Mohd Nizom Sairi.
He emphasised that e-invoicing was designed to accommodate the GST mechanism and that the adoption of this system would certainly push the cash economy and shadow economy to disclose their financial transactions.
“The people are really talking about the reintroduction of the GST, and if it happens, you don’t have to do anything further. It (e-invoicing) actually caters for the GST system,” he told reporters on the sidelines of the Grant Thornton Malaysia’s seminar on “Budget 2024 – Budget Highlights and Recent Tax Developments” yesterday.
Mohd Nizom further elaborated that, based on country case studies, the application of e-invoicing would require businesses to maintain a comprehensive record of their transactions and completely report it to the IRB.
“There are a lot of activities under the radar that will be forced to come forward and operate above the board,” he said.
It was reported that Malaysia’s shadow economy currently accounts for 21% of the gross domestic product (GDP) or an estimated RM330bil.
On the cost of the e-invoicing implementation, Mohd Nizom acknowledged that there will be costs involved in the adoption of e-invoicing, particularly in amending the current taxation system to suit the requirements of the e-invoice system.
Meanwhile, the federal government’s revenue collection in 2024 is envisaged to record a marginal growth of 1.5% to RM307.6bil or 15.6% of GDP, driven by higher tax collection.
Tax revenue is the major contributor and is expected to grow by 6.4% to RM243.6bil, which constitutes RM79.2bil of total revenue or 12.3% of GDP. — Bernama
