THE e-invoicing system, to be rolled out gradually this year, will enable more effective detection of tax evasion, says Deputy Finance Minister Lim Hui Ying.

The Finance Ministry will monitor the implementation of the system accordingly, she said.

While she acknowledged the potential impact of the system on taxpayers, especially those with higher tax obligations, Lim assured that assistance will be prioritised for vulnerable groups in the B40 and M40 segments.

“The government will give priority to the B40 group and part of the M40 group, if affected, by providing facilities such as cash assistance to reduce their tax burden,” she told the Dewan Rakyat yesterday.

Lim was responding to a supplementary question from Parit MP Muhammad Ismi Mat Taib regarding government measures to curb potential misuse of tax declarations under existing and new tax structures.

Prime Minister Datuk Seri Anwar Ibrahim had announced that the e-invoicing system will begin in August with taxpayers who earn an annual income exceeding RM100mil, with its phased implementation across income groups to be fully realised by July 1 next year.

The Inland Revenue Board (LHDN) said tax evaders and the shadow economy can be contained with the introduction of e-invoicing as it can reduce unreported sales and false invoicing.

Its implementation is also aimed at reducing taxpayers’ compliance costs and enhancing the transparency of business transactions.

Lim also disclosed measures to bolster revenue mobilisation, including expanding the tax base, refining tax structures and legislation, as well as providing tax incentives.

These efforts, she said, are integral to the move to streamline medium-term tax planning and align it with expenditure.

Highlighting the government’s commitment to fiscal responsibility, Lim said the enactment of the Fiscal Responsibility Act 2023, effective from Jan 1, 2024, is aimed at strengthening the nation’s fiscal governance and discipline.

She also noted that government revenue in 2024 is projected to increase to RM312.159bil, with the tax measures outlined in Budget 2024, higher tax collections and robust economic growth.

“Tax revenue remains the main contributor, accounting for 79.5% of total revenue or 12.57% of the country’s gross domestic product (GDP), while non-tax revenue represents 20.5% or 3.2% of the GDP.

“Revenue collection will be supported by strong economic growth along with measures taken to further enhance revenue mobilisation through expanding the tax base and improving tax compliance and transparency,” she added.

https://www.thestar.com.my/news/nation/2024/03/28/gradual-rollout-of-e-invoice