KUALA LUMPUR: The government's move to implement e-invoicing is a significant step towards digitising governmental transactions, but it also presents several challenges, particularly for the automotive industry.
E-invoicing refers to generating, sending, receiving, and storing invoices in a digital format. This system replaces the need for paper-based invoices and streamlines the invoicing process.
Sectors within the automotive industry that are expected to be affected include automotive finance and insurance, automotive repair and maintenance, automotive parts and accessories, car dealers, and vehicle manufacturers.
Universiti Utara Malaysia School of Technology and Logistics Management senior lecturer Rohafiz Sabar said that the country's automotive industry is likely to face various challenges in adapting to e-invoicing, including implementation costs, resistance to change, and data security issues.
"However, with the right support from the government, such as financial assistance, training programmes, and technological infrastructure improvements, car dealers can overcome these challenges and successfully implement the e-invoicing system," she said in an interview with Bernama.
Rohafiz emphasised the automotive industry's importance in leveraging government support to ensure a smooth and effective transition.
"The government could provide financial assistance or tax incentives, particularly to car dealers, to reduce the burden of e-invoice system implementation costs.
"This could take the form of grants, low-interest loans, or tax deductions for investments in e-invoicing technology. Special grants could also be made available for small and medium-sized enterprises (SMEs) in the automotive sector that adopt the e-invoice system," she said.
Rohafiz also suggested that the government could offer training and capacity-building programmes to help smaller automotive businesses and their employees adapt to the e-invoice system.
"This includes training courses, workshops, and online educational resources to enhance their technological skills. Training programmes provided by government agencies or in collaboration with educational institutions could offer subsidised e-invoice courses," she said.
Rohafiz noted that the government could also improve technological infrastructure and security to support the implementation of e-invoices.
"This includes providing faster, more secure internet networks and supporting robust cybersecurity systems. The government could invest in high-speed internet networks in rural areas and provide guidelines and technical support for cybersecurity for small and medium-sized businesses," she said.
The senior lecturer further noted that implementing e-invoicing in the automotive industry in Malaysia is expected to lead to increased transparency and market confidence, higher operational efficiency, and innovations in financing and marketing options.
"These effects will help drive a more sustainable and competitive automotive industry in the long term. With government support and strong collaboration between automotive industry players, introducing e-invoices can become a crucial step towards comprehensive digital transformation within this sector," she added.
Meanwhile, Malaysia Institute of Transport director and Universiti Teknologi MARA associate professor Wan Mazlina Wan Mohamed said that government support is expected and needed for a smooth transition.
"Incentives for SMEs implementing e-invoicing will contribute tax returns to the Inland Revenue Board of Malaysia (IRB) and indirectly help boost the country's economy," she said.
Wan Mazlina said that transitioning to e-invoicing might require significant investment in setting up network systems, a stable internet connection, and updated software for smaller dealerships.
"Additional costs may arise from hiring and training additional staff to manage administrative tasks, especially if the business owner is directly involved in operations," she said.
The associate professor also pointed out that, in the long term, the effects on the Malaysian market will make it easier to trace car purchases within the automotive industry.
"Once both businesses and consumers are familiar with the system, it will reduce the need for manual intervention and minimise the risk of human error. Data reconciliation between e-invoices and sales and service tax (SST) returns will streamline tax compliance processes, saving time and effort for businesses," she added.
On its website, the IRB stated that e-invoice will be implemented in phases to ensure a smooth transition.
"This applies to taxpayers with annual revenue or sales exceeding RM100 million by Aug 1, 2024, taxpayers with annual revenue or sales exceeding RM25 million and up to RM100 million by Jan 1, 2025, and all taxpayers by July 1, 2025," it said.