Small businesses across Malaysia will get some breathing room next year, following the government’s decision to raise the e-invoice exemption threshold from RM500,000 to RM1 million in annual revenue.
The move, announced by Prime Minister and Finance Minister Datuk Seri Anwar Ibrahim, comes after months of growing concern from micro and small enterprises about compliance costs and digital readiness.
Speaking at the Sentuhan Madani Bersama Rakyat Sabah programme at the Sabah International Convention Centre (SICC), Anwar said the Cabinet reached a preliminary decision after reviewing direct feedback from affected business owners.
“So we reviewed it quickly. After carrying out the assessment, the Cabinet made a preliminary decision yesterday. These small and medium businesses felt this would add pressure and costs. I heard them… so small companies will no longer be compelled to implement e-invoicing,” he said.
E-Invoice Implementation Eased
The adjustment reflects a more practical and empathetic approach to policymaking, especially for small businesses that have been vocal about the challenges of adopting new systems. Many have said the financial and operational burden of shifting to e-invoicing would be tough to absorb, especially while navigating rising costs and post-pandemic recovery.
This marks a significant shift from previous expectations and aligns with parliamentary discussions held in recent weeks, where several associations urged Putrajaya to reconsider the threshold.
The change effectively means that thousands of small firms will not be forced into e-invoicing on Jan 1, giving them more time to adapt to the government’s broader digitalisation push. For businesses earning above RM1 million, further details and cost implications will be studied as part of the next phase of implementation.
Fast-Tracking Tax Refunds
Beyond the e-invoicing issue, Anwar also addressed another long-standing frustration among small business owners; delayed tax refunds. To resolve this, Anwar announced an immediate corrective measure: the government will double December’s tax refund allocation from RM2 billion to RM4 billion to expedite outstanding payments.
“I will increase the allocation from RM2 billion to RM4 billion so payments can be completed,” he said, signalling a more proactive stance on easing the cash-flow strain faced by businesses.
Anwar also took the opportunity to reaffirm the federal government’s commitment to resolving Sabah’s long-standing 40% revenue claim under the Malaysia Agreement 1963 (MA63). He stressed that this matter is not political theatre, but an active policy priority. The Technical Committee, chaired by Treasury secretary-general Datuk Johan Mahmood Merican, has already begun preliminary meetings with Sabah state secretary Datuk Seri Safar Untong to outline the parameters for implementation.
E-Invoice Change: A More Flexible and Business-Friendly Rollout Ahead
With the new RM1 million exemption threshold now in place, the government appears to be signalling a more flexible, consultative approach to digital compliance. The decision offers immediate relief to smaller firms while still keeping Malaysia on track for a national e-invoicing ecosystem.
The coming months will see more detailed announcements from the Finance Ministry on the next phases of implementation, especially for firms approaching or exceeding the RM1 million mark.
Source: here
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