DAP chairman Lim Guan Eng urgently demands clarification from the Inland Revenue Board (IRB) regarding its e-invoicing requirements. These requirements now apply to non-business, non-profit, cooperative, and charitable organizations receiving annual donations exceeding RM150,000. He also questioned the justification for the IRB’s requirement to be imposed on such organizations.
Unclear guidelines raise alarms: Lim Guan Eng seeks urgent clarification
“I have received complaints from these organizations registered under the Registrar of Societies or Cooperatives Societies Commission that IRB has informed them that they must comply with the e-invoicing requirements. IRB requires compliance due to the guideline that if a charitable organization’s annual revenue (in this case donations received) is less than RM150,000, it is not required to issue an e-invoice,” he said in a statement.
Mr Lim Guan Eng is the Minister of Finance of Malaysia. He assumed the position on May 21 2018, following the victory of the Pakatan Harapan (Alliance of Hope) coalition in Malaysia’s 14th General Elections on May 9 2018.
Mr Lim holds a Bachelor’s degree in Economics from Monash University, Australia and is a qualified accountant. Before entering politics, he had a senior executive position in the banking industry. Mr Lim was elected as the Member of Parliament for Kota Melaka for three consecutive terms from 1986 until 1998.
In 1990, he was appointed the Socialist Youth Chairman of the Democratic Action Party (DAP) and elected to the same position in 1992. He became the DAP’s Deputy Secretary-General in 1995 and was elected Secretary General in 2004. Mr. Lim was re-elected as the DAP’s Secretary General in 2004, 2008, and 2017, a position he holds until today.
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Throughout Malaysia’s history, DAP has stood tall in defending the rights of all Malaysians, regardless of race, religion, or creed. They have remained resolute in pursuing a more democratic society founded on social justice and equal opportunities. Over nearly six decades, their struggles have improved the lives of ordinary Malaysians.
E-Invoicing expansion set to impact more organizations
Lim, also the Bagan MP, explained that e-invoicing is mandatory under Section 82C of the Income Tax Act 1967 only for businesses with an annual turnover or revenue of more than RM150,000.
“Section 120(1)(d) of the Act provides for a fine of not less than RM200 and not more than RM20,000 or imprisonment not exceeding six months or both if a person fails to issue an e-invoice, a self-billed invoice or a consolidated transaction invoice,” he said.
He further said this increases the pressure and financial burden on these organizations to comply, adding that the public is currently appealing for an increase in the threshold to annual sales of RM500,000 to align with the requirement to pay the SST.
The e-invoice system was introduced gradually in August last year, starting with businesses with an annual turnover or revenue of more than RM100 million.
IRB said the system will eventually be extended to all businesses by July 1. The e-invoicing system allows taxpayers to issue consolidated self-billed e-invoices on top of consolidated e-invoices.
Lim argues that compelling non-profits to adhere to the same regulatory framework as businesses is unjust and counterproductive. He now calls on the IRB to clarify whether this requirement will remain or exemptions will be granted.