In his New Year’s message at the monthly assembly of the Prime Minister’s Department today, Prime Minister Anwar Ibrahim said some companies were “still not ready because the cost of preparation (for e-invoicing) is quite high”.

The Inland Revenue Board said last June that the finance ministry had decided that e-invoicing for companies earning between RM1 million and RM5 million would be deferred from July 1, 2025 to Jan 1, 2026.

Last month, Anwar said the government had also decided to exempt businesses with annual revenue under RM1 million from e-invoicing.

Separately, Anwar said the government would also raise the threshold for small- and medium-sized enterprises to be subject to service tax on rental services from RM1 million to RM1.5 million in total annual sales.

This means that only businesses with sales exceeding RM1 million will be required to pay service tax on rental services.

Anwar said although the threshold was previously raised from RM500,000 to RM1 million, the tax remained a burden for many small businesses.

“After reviewing the matter, we decided to raise the tax exemption for SMEs with total annual sales of up to RM1.5 million,” he said.

Anwar said the service tax would also be reduced from 8% to 6%, applicable to the rental of non-residential premises such as offices, warehouses and commercial assets.

“As you know, the minimum rate in the nation’s taxation system is 6%. As such, I am only able to reduce it to 6%, with a loss of nearly half a billion ringgit in revenue annually,” he said