PETALING JAYA: The Phase 2 rollout of Malaysia’s e-invoicing system on Jan 1 has presented challenges, with technical issues, unclear directives and logistical constraints complicating the transition for businesses.
This phase targets companies with an annual turnover of between RM25mil and RM100mil.
While many have adopted the system, some remain unprepared, said Malaysian Consortium of Mid-Tier Companies president Martin Ang.
He attributed the delay to unclear updates from the Inland Revenue Board (LHDN) and difficulties in obtaining information, such as the Tax Identification Number from the supply chain side.
Ang also highlighted mismatches between business systems and LHDN’s requirements, which have led to costly training and investments in new infrastructure.
“Some form of monetary assistance to defray the high costs would be appreciated, especially as most existing business support systems are not compliant and need to be made compliant, which will incur significant expenses.
“We urge LHDN to provide unlimited free or subsidised training on e-invoicing, especially on the supply side.
“Grants, subsidies or tax exemptions for investments in new compliant business support systems should also be provided to further accelerate the transition to e-invoicing,” he said.
Concerns have also arisen about company representatives’ access to confidential data, said Associated Chinese Chambers of Commerce and Industry of Malaysia treasurer-general Datuk Koong Lin Loong.
“Currently, companies must appoint a representative, who is usually a regular employee, to handle e-invoicing transactions.
“The issue is that many companies have found that these representatives have access to the company’s confidential information, such as income tax return forms,” he said.
He called on LHDN to implement safeguards to restrict representatives’ access to only e-invoicing-related information.
Koong also criticised the mandatory self-billing system, citing its complexity for smaller companies, which could lead to errors and penalties.
He proposed deferring its implementation until businesses are more accustomed to e-invoicing.
SME corporate and tax services provider Syarikat Ong Sdn Bhd managing partner Agnes Wong shared a similar opinion, noting that many of their customers struggled to adjust to self-billing.
“This transition requires additional time for them to align their operational workflows with the requirements of e-invoice adoption. At the very least, they should be given a grace period during the transition,” she said.
Business management solution provider Fast Track Sboi Sdn Bhd director Hong Gek Yeow emphasised the need for closer collaboration between LHDN and solution providers regarding system updates, particularly when updates are introduced just before deadlines.
“Schedules for system updates should be announced well in advance, allowing solution providers to allocate resources effectively,” he said.
Hong proposed that LHDN provide a dedicated test environment for solution providers and customers to trial new releases and upgrades to the LHDN MyInvois platform before deployment.
“Combined with a structured mechanism for gathering feedback, LHDN can then evaluate and prioritise these suggestions to make the system more supportive and user-friendly,” he added.
Business planning system provider Monitor ERP System Asia sales director Tyreal Tai pointed out technical issues, such as small file size limit on the MyInvois platform, which burdens companies processing large or complex invoices.
“This made it very inconvenient for some companies, as they had to manually split their invoices into multiple files, increasing processing time and administrative workload,” he said.
Tai also noted that many smaller businesses lack the necessary IT infrastructure and expertise for effective e-invoicing management.
