Digitalisation push may alienate old-school businesses, says MP

DAP's Tan Hong Pin says many elderly small businessmen cannot keep up with measures such as e-invoicing.

Bakri MP Tan Hong Pin said the implementation of e-invoicing had been burdensome for small businesses, who had to invest heavily in installing accounting software.

KUALA LUMPUR:

 A backbencher has cautioned Putrajaya against pushing to digitalise the taxation system too aggressively, saying it may leave some businesses behind, thereby creating digital inequality.

Tan Hong Pin (PH-Bakri) said digitalisation initiatives, including e-invoicing, might leave many small businessmen behind, as a good number of them were older folk who had been in business for a long time and did not rely on computers.

“Do we want to force them to close shop due to an inability to keep up with digital bureaucracy?

“Let’s not introduce something that could destroy the economic ecosystem for the sake of achieving unrealistic digitalisation key performance indicators,’” he said while debating the king’s address in the Dewan Rakyat today.

The DAP man said the implementation of e-invoicing had been burdensome for small businesses, who had to invest heavily in installing accounting software.

He pointed out that should they fail to prove compliance with the e-invoicing requirements, they would be subjected to penalties ranging from RM200 to RM20,000.

“Although the government has introduced its free MyInvois portal, such application software or portals are still seen as complicated for small businesses like street vendors. E-invoicing is an operational disruption for small vendors or companies.

“Consolidated e-invoicing requires meticulous daily record-keeping. For those not proficient in such clerical work, especially after a day of working in the kitchen, this has an added ‘fatigue cost’,” he said.

While Tan acknowledged that small businessmen were exempt from e-invoicing enforcement, they were still affected by the policy.

“Large companies cannot claim tax deductions if they purchase goods or services from small businesses that do not issue e-invoices. As a result, large companies will avoid or stop dealing with small businesses, even though the prices or services offered by these businesses are better,” he added.

Tan suggested eliminating “supply chain discrimination” by allowing big businesses to accept annual receipts from small businesses without affecting their tax deductions.

He also suggested easing the usage of the MyInvois app. “Is it reasonable for businessmen to fill out 55 details just for a simple transaction? I suggest that we limit the information that needs to be filled out to only the crucial details – tax identification numbers and transaction details and amounts,” he said.

On Jan 6, Prime Minister Anwar Ibrahim said the government had agreed to postpone mandatory e-invoicing for companies with total annual sales of RM1 million to RM5 million by another year from its initial enforcement date of Jan 1, acknowledging some companies were still not ready because the cost of preparation was quite high. - FMT