Petaling Jaya (Dec 5) - The federal government has decided to push back the compulsory implementation of e-invoicing for businesses with annual turnover between RM1 million and RM5 million by another year. The requirement, which was due to take effect on Jan 1, will now be enforced later as many firms are still unprepared.
Prime Minister Datuk Seri Anwar Ibrahim said the postponement was necessary because compliance costs remain high for some companies. He made the announcement during his New Year address at the Prime Minister’s Department monthly assembly.
Previously, the Inland Revenue Board said the Finance Ministry had already delayed e-invoicing for this group of businesses from July 1, 2025, to Jan 1, 2026. Separately, the government has also exempted companies earning below RM1 million a year from the e-invoicing requirement altogether.
Anwar also announced changes to the service tax on rental services, with the threshold for small and medium enterprises raised from RM1 million to RM1.5 million in annual sales. As a result, only businesses exceeding RM1 million in turnover will be required to pay service tax on rental services.
In addition, the service tax rate for non-residential rentals such as offices, warehouses and commercial assets will be reduced from 8% to 6%. Anwar noted that although the minimum tax rate allowed is 6%, the reduction would result in an annual revenue loss of nearly RM500 million.
For Sabahans, particularly small business owners and entrepreneurs in rural and semi-urban areas, these measures ease financial pressure by lowering compliance costs and tax burdens, giving them more room to sustain operations and adapt gradually to digital tax systems.