Kuala lumpur: The e-invoicing exemption threshold has been raised from RM500,000 to RM1 million, providing businesses with increased clarity for planning and easing immediate compliance-related burdens, stated the Federation of Malaysian Manufacturing (FMM).

According to BERNAMA News Agency, newly elected FMM president Jacob Lee Chor Kok highlighted that the government's decision to double the allocation for tax refunds to RM4 billion from RM2 billion in December is expected to expedite outstanding payments and offer essential liquidity support.

'These strategic measures provide relief to the smallest segment of small and medium-sized enterprises (SMEs), many of which operate with thin margins and limited administrative capacity. This will alleviate financial stress across the manufacturing and SME sectors,' he said in a statement responding to Prime Minister Datuk Seri Anwar Ibrahim's recent announcement to ease the burden of SMEs ahead of the January 1, 2026 rollout.

The statement emphasized that raising the exemption threshold will allow micro and small businesses to digitalize at a manageable pace. Timely tax refunds are crucial as businesses operate on credit terms, face significant outstanding receivables, and pay taxes upfront before receiving actual income.

To streamline tax refund processes, Lee mentioned that FMM has proposed adopting a threshold-based approach, such as granting automatic full refunds for overpayments below RM1 million, to reduce administrative burdens for both taxpayers and the Inland Revenue Board.

'We also encourage an automatic offset mechanism where declared tax overpayments are applied to future tax liabilities. This reduces the government's need for large cash outflows for refunds while easing financing burdens on companies preparing for upcoming tax instalments,' he added.

Overall, Lee noted that the government's decisions will stabilize business cash flows, strengthen compliance readiness, and promote a smoother transition into Malaysia's evolving digital tax ecosystem.