Following the outcome of the Sabah State Election, the government appeared to soften its stance on several new regulatory measures. One of the most visible changes was the relaxation of Malaysia’s e-Invoicing policy.
Under the latest announcement, small and medium enterprises (SMEs) with annual revenue below RM1 million are exempted from e-Invoicing, an increase from the earlier RM500,000 threshold. In addition, businesses with annual revenue between RM1 million and RM5 million have been granted a one-year deferment, postponing their mandatory compliance originally scheduled to begin on 1 January this year.
At first glance, these changes sound like good news, and they are understandably welcomed by businesses that fall into these two categories. However, when examined more closely, this exemption and deferment may create long-term disadvantages rather than relief.
Unless the government abolishes the e-Invoicing policy entirely (which is highly unlikely), the new threshold effectively splits the business ecosystem into two worlds:
Those that comply, and those that do not.
To illustrate the issue, let’s look at a real-world example from the parking industry.
The Parking Operator Dilemma
Imagine you are a small parking operator serving a well-known commercial building. Your annual revenue is just below RM1 million, and you feel relieved that you are exempted from e-Invoicing.
The problem begins almost immediately.
Some of your regular parkers request e-Invoices so they can claim parking expenses from their employers. These employers are typically medium-to-large companies with annual revenue exceeding RM5 million, meaning they must comply with e-Invoicing regulations.
You reject the requests because you are legally exempted or deferred.
What happens next?
- The parkers escalate the issue to their employers
- The employers become frustrated because:
- They must verify whether the parking operator is genuinely exempted
- They may need to issue self-billed e-Invoices just to recognize parking fees as tax-deductible expenses
- Extra administrative work is created for no productive reason
Eventually, some of these complaints reach the building owner or property manager. Over time, this forms a perception that the parking operator is “not compliant” or “administratively troublesome”, even though the operator is technically following the law.
When the parking contract expires, renewal becomes uncertain.
The Hidden Cost of Staying “Small”
There is a second, more dangerous side effect.
To avoid the complexity of e-Invoicing and the perceived administrative burden, some operators may deliberately choose to stay below RM1 million in annual revenue. This creates:
- Artificial growth ceilings
- Reluctance to expand operations
- Fragmented, inefficient industry players
Instead of encouraging competitiveness and professionalism, the exemption risks locking small businesses into a comfort zone, precisely the opposite of what a modern digital tax system should achieve.
This is the real dilemma created by splitting businesses into two regulatory worlds.
Our Recommendation
Whether you are legally required to comply with e-Invoicing or not, operating as if you are compliant is the smarter long-term strategy.
For parking operators, this is no longer a technical challenge. Platforms like TimeTec already embed e-Invoicing directly into their parking management and accounting systems, allowing operators to issue compliant e-Invoices seamlessly without increasing operational complexity.
In an ecosystem where your customers, tenants, and partners are increasingly regulated, voluntary compliance is no longer optional; it is a competitive advantage.
Short-term relief feels good.
Long-term readiness keeps your business alive.
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