KOTA KINABALU: Parti Warisan vice-president Datuk Junz Wong has called on the state government to postpone the implementation of electronic invoicing (e-invoice) system in Sabah.

He said that the Inland Revenue Board’s (LHDN) approach fails to consider Sabah’s circumstances, which differ significantly from Peninsular Malaysia.

"We have seen cases where students had to climb trees just to get a stable Internet signal for their exams," Wong added.

He pointed out that even small and medium enterprises (SMEs) in Kuala Lumpur are struggling with the transition to e-invoicing, adding that Sabah SMEs face greater technological disparity due to significant gaps in digital infrastructures in the region.

Responding to Finance Minister II Datuk Seri Amir Hamzah Azizan’s recent announcement of an e-invoicing exemption for micro, small, and medium enterprises (MSMEs) with annual sales below RM150,000, Wong argued that additional measures are necessary to address Sabah’s specific needs.

He suggested that if a delay in implementation is not possible, the threshold for mandatory e-invoicing should be raised to RM1mil for businesses in Sabah, reflecting the local economic realities and reducing the burden on small operators.

"Implementing e-invoicing without addressing our serious Internet connectivity issues and the high costs of digital compliance could lead to many small businesses closing, similar to the hardships faced during the Good and Services Tax (GST) implementation.

"By raising the e-invoicing threshold, we can give Sabah’s small businesses the breathing space they need to grow and adapt to digital changes at a more manageable pace," he said in a statement on Wednesday (Aug 14).

The Tanjung Aru state assemblyman also said there was an urgent need to improve basic infrastructure, particularly Internet access across Sabah including its rural areas, before enforcing such digital policies.

"We must prioritise strengthening our foundational infrastructure to ensure that no business, especially those in remote areas, is left behind in this digital shift," he said.

https://www.thestar.com.my/news/nation/2024/08/14/e-invoicing-risks-stifling-sabah039s-small-businesses-says-warisan-vp