LHDN on TIN requirements, interim solutions and support, handling and penalising errors, and much more.

In this episode of Enterprise Explores, BFM dives into the imminent implementation of Malaysia's new e-invoicing regime, set to kick off on August 1st for large businesses (over RM100 million in annual revenue). Joined by LHDN’s Dr. Rasyidah Che Rosli and tax consultant Thanneermalai of Thannees Tax Consulting Services, the discussion focuses on addressing the concerns raised by businesses.

The conversation attempts to cover practical advice for businesses to ensure a smooth transition, insights from the pilot program, penalties for errors and mistakes, navigating the needed data collection to issue e-invoices and interim solutions, and more.

Among other things that came up in this conversation was that they understand that this transition to e-invoicing is a significant change to business processes and that in the early stages of implementation, they understand that there will be unintentional errors that need to be addressed. Their intention is not to penalise from day one, but taxpayers will need to get on board and familiarise themselves with the process in good faith. LHDN is aware that taxpayers will need guidance and support during the transition.

Presenter: Roshan Kanesan
Producer: Roshan Kanesan, Kishan Sivaswamy

Podcast Transcription

Roshan Kanesan:
Good afternoon, I'm Roshan Kanesan and welcome to Enterprise Explores. The show where we help you navigate the ever-changing universe of business from the headlines to the bottom line.

And the bottom line is that we're just two weeks away from the implementation of the new e-invoicing regime, but there are still plenty of grey areas as illustrated by our conversation last week with Dr. William Ng, president of the Small and Medium Enterprise Association, who expressed some concerns from SMEs, including the compressed timeline, potential concerns over potential disruption daily business operations, as well as pressure from the companies that will be in the first phase on the smaller suppliers to also comply with e-invoicing earlier than they should.

So we're going to hopefully address some of these concerns that were expressed last week with Dr. Rasyidah Che Rosli, Director of the E-Invoice Division, Tax Operations Department at LHDN, as well as the Managing Director of Thannees Tax Consulting Services, Thanneermalai Somasundaram.

And I'll just recap some of those key details. From August 1st this year, taxpayers with an annual turnover exceeding RM100 million will have to implement the e-invoicing regime or at least start it out. There is a pilot program ongoing, businesses with revenue between RM25 million and RM100 million will start on January 1st. And by July 1st next year, all businesses, barring the businesses making below RM150,000 a year, will have to adopt e-invoicing as of July 1st next year.

Dr. Rasyidah, Thanneermalai, we'll see you both in the studio today. And usually, I've not had this pairing together, so this would be an interesting one.

Dr Rasyidah:
Thank you. Good afternoon.
Thank you, Roshan. Nice to meet you again.

Roshan Kanesan:
Nice to see you again. I understand that both of you have had interactions, of course, with your own clients, within other sessions as well.

Thanneermalai:
Yeah, we have had. And we have also been talking to one another, I think, for the past one and a half years.

Roshan Ganesan: Well, of course, about today's topic, right?

Thanneermalai: About the e-invoicing, quite a long time.

Roshan Ganesan:
We're now two weeks or more or less two weeks away from the first phase of implementation. As I mentioned earlier, last week, we had a conversation with the president of SAMENTA. And there was some concerns that were brought up. Hopefully, we can address some of them through the course of this conversation.

So August 1st, businesses earning over RM100 million revenue a year will have e-invoicing coming to play for them. As we have this last leg of the phase right now, what should businesses be prioritizing to ensure this smooth transition to e-invoicing? Whoever wants to take this up first, I'll just go ahead.

Dr Rasyidah:
Okay. Maybe advice from Hasil, this is the last leg. I agree with you. Only 14 days left before we go live, we have our countdowns at the office. And what we mentioned to the taxpayers, what they need to prioritize is, first of all, finalising their e-invoicing solution selection. So that if they cannot finalise their e-invoicing solution—as other countries are also implementing—we also have our free portal that we provide to all the taxpayers. So they should consider to use MyInvois free portal as an interim solution for them so that they can comply with these e-invoicing requirements as well.

And maybe besides that, we always mentioned to the taxpayers, they need to complete their testing based on all their business scenarios. So those who are planning to use this API for the integration, because this is the last leg of their preparation, they need to prioritize the integration which is involved with their financial system and what's important is to conduct the end-to-end testing to ensure that the critical functions are operational.

Thanneermalai: They should be in the testing stage now.

Dr Rasyidah: It should be a final stage.

Thanneermalai:
And they should be now simultaneously working at two ends of the spectrum. One thing before I go further is, it's extremely important to appreciate the efforts that the IRB has put in. And even last night, late last night, I was actually going in and I tested you. And I said, you have basically got feedback forms, you have actually got a chatbot, you can even chat with somebody. And there's a 24-hour line. And I called at 10 o'clock, at 10:30 in the evening just to test this. And actually they picked up the phone. And I said, "I'm sorry, I'm just testing you."

Dr Rasyidah: So maybe tonight you can just test it again at 3:00 a.m. and get the feedback.

Thanneermalai:
You know, it was good. It is somebody—I didn't ask them any technical question, but the help is there in all forms, you know. And I really appreciate what Dr. Rasyidah and her team are doing. They've been actually replying. They're getting thousands of questions and they are replying. So don't hesitate to ask the questions. You don't need just consultants like us and all. You can ask. But sometimes they don't have the time, they give you more generic answers. If you want more specifics, then you talk. That's one thing.

The testing stage must be now. You must be ready. But the front end also has to be done. You see, many—I want to make this point very clear—many have this understanding, a significant portion of them, maybe 25% to 30% of the people who are in the RM100 million category, who believe that putting in the software—either you're customizing your own software to connect or you build an API—will solve the problems. It will not. You must understand the software is just a pipe that's going to digitalize your information and then pass it into the MyInvois portal so that LHDN will be able to manage it for you.

The other thing is they have to understand all the exceptions. The difficulties they are now coming into in this last phase are issues around what do they do with every transaction. They're thinking that the software thing will solve it, but the software vendors will just do the connections for you. They're not going to solve your individual problems. You know, what do you do with the staff claims? What do you do with the reimbursements and the disbursements? What do you do if you have consortiums in your group, how do you deal with it? How do you invoice it? How do you deal with it?

One of the biggest things will be self-billing. They don't appreciate it, and I have a feeling that sometimes they're going to make mistakes, you know. So they have to look at the front end and they've got to reorganize. There's a business mapping or a gap analysis they must do to identify each and every transaction, and also potential transactions that will take place. They must be ready. The software guys, there may be changes to be made to the software so that it actually integrates properly.

And it is best you test it now, because if you don't test it and you're going live on 1st August, Dr. Rasyidah, they're going to find inevitably there will be hiccups. There will be hiccups because there will be rejections in the system because of the SDK or the system requirements if it doesn't entirely fit in. And many of them—it's shocking, actually shocking, Dr. Rasyidah—you'll be surprised I come across taxpayers who have just got into it in the last one week or two, and some are still thinking about it because of the August 1st deadline.

Dr Rasyidah:
We also can feel it. It is shown in some of the questions that we receive. That's why we mentioned that the taxpayer journey is different. Some of them have early preparation, but maybe some experience or their decision to use the MyInvois portal comes a bit late compared to the other taxpayers.

Thanneermalai:
Yes, I totally agree. And you need minimum, what the software, even the quickest you can do it. They want 30 to 40 days to implement it. So if you are now appointing somebody to deal with the software and it's about 30 to 40 days, the front end also requires, at least fastest three weeks. Because we have to also, you see, Dr. Rasyidah, we are finding we have to train the people. We've got to explain to them, and get them to understand. Because some of them are working on the basis, "It doesn't matter, I'll just carry on life as it is," you know.

Dr Rasyidah:
To ensure the successful—I guess to ensure the successful implementation for each company, the critical part, I agree with Mr. Thannees, which is training staff who will implement this e-invoice, so they need to train, so that either mechanism they want to use, is MyInvois Portal or API, they are used to it, to ensure that they can submit this e-invoice.

Roshan Ganesan:
Dr. Rasyidah, I understand that there's been a pilot program that has been going on. And given that, I'm sure that in test programs like this where you can get some great feedback, right? So what has been some of the key findings and feedback from the companies participating in the pilot program? And how will that be factored into the e-invoicing rollout?

Dr. Rasyidah:
Okay, of course, either the pilot company or the taxpayers, we receive various feedback from the taxpayers, but maybe I can just share in terms of the system integration. So the one that we receive from the pilot company experience is regarding the digital signature. So at the early stage of the implementations, we should consider that there will be a challenge faced by the company. So that's why we enabled both the versions. We mentioned through version 1.0, which is without the digital signature, we will allow this version until the taxpayers are comfortable with it.

And of course, we encourage the taxpayer also to use version 1.1 if they don't have any difficulty. So version 1.1 with the digital signature, because it will have an added security functionality as well. So as of now, we enable both versions, which is the version with the digital signature and without the digital signature as well.

And the most highlighted issues by the taxpayer—because this is the early stage of the implementations and a new initiative that we implement in Malaysia—is the difficulties for them to obtain the TIN number, the Tax Identification Number.

Dr. Rasyidah:
Yeah, from the buyer. So as everyone is aware through the guidelines, we did mention if the buyer does not request for e-invoice or the seller doesn't have the information for the buyer, except for the seven activities that they need to issue for each transaction, they can issue consolidated e-invoices so that they can issue using the general TIN as well.

Roshan Ganesan:
Okay, so then as the invoicing continues to roll out, then everyone should get their TINs in place, except for the RM150,000 and below folks, for now.

Thanneermalai:
The one thing that actually, Dr. Rasyidah, is going to come up is they're requesting now, everybody's requesting for information from the suppliers. But there's a tendency for the suppliers to say, "I've got other things to do. Why do I need to reply to this?" Because they don't actually. So that's one of those concerns where what happens to the, what happens to the people who actually need to receive the invoices from the suppliers, and the suppliers actually do not give that information? You know, the 55 fields of which 28 are compulsory, and another, out of the 12, we have 5 fields which are absolutely mandatory. So if you look at it, it's about 33 fields that are absolutely mandatory.

And if they don't reply, we can't force them because we still have a business relationship. I'm looking at it as a businessman, and say, "I can't go and force the guy because I still need to do business with him." On 1st of August, I cannot say, "You didn't give me the information so I cannot do business." I have to carry on. So that's one issue.

The other thing I think that people don't actually—they're very—they're also concerned. One of the concerns that they have is, I tell you, Roshan, is the cost and the time involved because this is an additional effort. This is quite a big effort to implement it. And, the thing is also, the rules have to be understood. You see, I see it in different buckets, you know. I see that you must understand what is excluded, what is exempted, and what is outside the system. So, it starts off very simple, you see, Dr. Rasyidah, that, "We'll digitalize it," very simple motherhood statements.

But once you get into the details, Dr. Rasyidah, is everyone should understand the rules. And one of the biggest issues is the self-billing. The self-billing is quite straightforward for 90% or 95%, but that 5% to 10% is a problem when it comes to, they must know the rules like your services imported, which is one, which is at the time of the payment or, if you're talking about goods, it's one month after clearance.

The words like "customs clearance" become a problem also. I give you a simple issue, if the goods come in and if they're cleared out of port, that's clearance. But if the goods go into the bonded area, Dr. Rasyidah, it doesn't leave into the principal customs area. So, that only leaves when it leaves the bonded area. So, issues like that, we need more granular details.

Roshan Kanesan:
And we'll get into some of those concerns in just a little bit. I have another concern, I need to go into a few messages first. Folks, this is Enterprise Explores, the show where we help you navigate the ever-changing universe of business, from the headlines to the bottom line. And today, we've been talking about the upcoming e-invoicing regime and some of the concerns that businesses have, and helping us with this conversation has been Dr. Rasyidah Che Rosli, Director of the E-Invoice Division, Tax Operations Department at LHDN, as well as Thanneermalai, Managing Director of Thannees Tax Consulting Services.

Roshan Kanesan:
Now, towards the end of the earlier part of the conversation, Thanners, you were expressing some of the key concerns that you're hearing from your own clients. Unfortunately, I had to interrupt that briefly. But that said, I do want to get into some of those concerns. I think those are some of the real things, especially the first phase of folks who are going to be implementing. Dr. Rasyidah, what can you tell us about some of those concerns? Maybe Thannee, feel free to elaborate as well.

Dr. Rasyidah:
Okay. I think the most concern by the taxpayer is the transition period, because this is not a big bang implementation. It is a phased implementation. So what you hear from the public, especially as you mentioned that you had a conversation with Dr. William with SAMENTA, which covers SMEs, they're worried from their side on how they can handle this e-invoice implementation.

So of course, the implementation responsibility falls under the issuer, which is the first category that will start 1st of August. And they're also dealing with various taxpayers, including small businesses as well. So in this scenario, they cannot force small businesses to also issue e-invoices for them. So let them implement when the time comes—if they are 1st July, then they will issue on 1st July.

But what I can foresee here is that maybe the issue is like Mr. Thannee mentioned just now. Once the large companies fall into this e-invoice implementation, they will do a lot of data gathering. Why? Because they want to issue this e-invoice. Even if we provide the concession that they can do the consolidated e-invoice, most of the big companies are looking—their vision is to look at doing system changes to make sure that they are able to issue for each transaction and also consolidated e-invoices.

So we can see that the challenges might be maybe a misunderstanding from small businesses that they are forced to issue e-invoices. It's just that the larger businesses want to collect the information, and maybe they ask for the TIN number. So there's feedback also where they mention that if small businesses don't want to give the information, they don't want to do business.

Of course, this is a business decision. But this is not the objective. Why we want to include e-invoicing is for digitalization, to make businesses more effective and efficient. The intention of these larger businesses is just to get the information on who they are dealing with. But they cannot force these small businesses to issue e-invoices based on their mandatory timeline.

Thanneermalai:
Dr. Rasyidah, I think so. The big businesses also need not be overly worried. You know, if you cannot implement it on the first day. They can still issue consolidated, or they can actually carry on. You know, I mean, correct me if I'm wrong. On 1st of August, you're not absolutely, if you don't do, you're not going to be actually penalised, and you're going to be hit by...

Even Dr. Rasyidah's boss. He mentioned openly just, I think yesterday or something, he says, "Folks, don't worry. We are not going to come in and hit you with a RM20,000 fine." It's not going to be guns blazing on day one. No, because our intention is not to penalise; it cannot be like that.

I see my dealings with Dr. Rasyidah's team and her boss and everyone else is, "We'll help you. We'll help you." The message that came out is, "We'll help you." So there's help.

The second thing is, I think at the same time, taxpayers can't take it—one thing I want to be very clear, and I think Dr. Rasyidah can confirm, is... there's a tendency because we've been postponing some of the tax laws in the past, the Low Value Goods Tax, the High Value Goods Tax, and we have a track record. There is an impression that, "Oh, this also government will postpone, maybe one month or two months, or maybe they'll give me an extension."

There's a rumor going around that some people have actually gotten extensions of time; they've been allowed to defer. So far, I don't believe that's the case. And Dr. Rasyidah, is there any—let's clear the doubt. Are you all actually allowing certain companies or exceptions where you're giving deferral of this? Are you allowing them to defer the implementation?

Dr. Rasyidah:
Yeah, I think the idea from the taxpayers, maybe there would be an extension of time, but I can confirm that, as stated by our CEO in many platforms, he always highlights that there will be no extension of time. So as of now, the response from the IRB is the same: there will be no extension of time. We will implement based on the announcement made by the government according to the phases.

But I agree with you. First day we implement this new initiative, I'm sure that any tax authority around the world won't penalise on day one.

Thanneermalai:
I'll tell you, for the next two weeks—the first two weeks—you will find... but I'm telling taxpayers, don't worry. If you are really unable to issue it on the first, or the second, or the third, you carry on issuing. Then what we need to do is actually within that month convert it into e-invoices.

Dr. Rasyidah, is that possible? Because it is not the end of the world. We can still do business issuing normal invoices, but the only thing is you might have a double job of converting it, am I correct?

Dr. Rasyidah:
Yeah, I guess the idea that you mentioned is that they have the, maybe, pro forma invoice or commercial invoice, and then they create the e-invoice. From our side, once they create the e-invoice, they need to send it to the IRB for validation, because the system window is only 72 hours to accept validation; if more than that, it will be a rejection.

Thanneermalai:
But coming to that, Dr. Rasyidah, if the invoice is issued on the 1st of August, then I come in one week later when I've sorted my problems, and then I come back to that invoice of the 1st, and now... actually, I agree with the client, I'll give you a practical solution. I agree, look, I'm now giving you an e-invoice, the same invoice I give to you on the 7th. So I treat it as the 7th, and then you give me...

Dr. Rasyidah: Business as usual.

Thanneermalai: That one is an e-invoice. I'm just taking a business decision. Then I give it to you on the 7th. You come back to me, I mean, within 72 hours I get it validated and all that with a QR code. I'm perfectly fine because you are more interested, as far as IRB is concerned, in completeness of information so that we file the right amount and pay the right amount of tax. So nobody is actually defaulting.

Roshan Kanesan:
So I think the bottom line here is that there is an expectation of a transitionary period. No one's expecting everyone to be guns blazing ready on August 1st. And one of those concerns was just the level for honest mistakes. What would the treatment be like for those? Are they going to be hit with penalties of RM200 to RM20,000? And that's for each instance of non-compliance. I think the word there is non-compliance.

Dr. Rasyidah:
I think that's the concern by all the taxpayers because the penalty is there through the legislation. But maybe I can just share our—I mean, we understand that this is a transition to e-invoicing, which is a significant change to the business process. This is their life. So we also acknowledge their best efforts to ensure that they comply with the requirement.

Thanks to most of the companies, they try hard to make sure that they comply with this e-invoicing requirement. But along the way, at the early stage of the implementation, for sure there will be unintentional errors which they need to fine-tune somewhere. So that's why we always mention to the taxpayer: it is important for them to familiarise themselves with the e-invoicing process. Of course, it is not our intention to penalise from day one. It's just that we want everyone to get on board and familiarise themselves with the process—the whole process—and what we can do from our side to give guidance and support to the taxpayer. We work together among all this community.

Thanneermalai:
No, I think you are. And I think look at past precident when we introduced a major thing in 2015, the GST. Practically, there were nearly 12 months of errors. You know, and what Customs agreed—and generally on a policy matter, MOF also agreed—is that they're not going to be really imposing penalties for those mistakes made in the first 6 months to even 12 months, you know.

But what I will advise people is very simple and practical: if you have made a mistake, what we are finding is you shouldn't go back four years later and then say, "I made a mistake," which is happening. Now with GST, you'd be surprised, 2015 issues are still lingering in 2024. It's still hanging over our heads.

But here, my advice is, if you know you have made a mistake in the first two months or three months, put it on record that a mistake has been made, write to the IRB and inform them, and say, "I'm sorry, I didn't understand this. This is why I made the mistake." Put it down on record because you cannot remember it six months or nine months later. There's a tendency to forget. Don't forget it. If you've made a mistake, never mind, correct the mistake within two or three months, write to them.

And I am really positive—although I shouldn't say this to Dr. Rasyidah—I am very positive, knowing the people over so many decades I've handled them, deal with them, that they will listen. They will listen. You do not have to worry about the fact that they will not listen. They will listen. The odd one or two may not listen, but you can always get the higher-ups who are actually Dr. Rasyidah and the Deputy Director General like Datuk Abu Tariq and all—very accommodative people.

Roshan Ganesan:
So the tone is really: we want e-invoicing to be successful, we will help businesses be successful in this implementation. We've got a phased approach as well—three exact timelines, at least for now. And there will be mistakes; I think that's the thing that's very common, especially for high-volume businesses, I presume, like with the B2C folks who are doing a lot of transactions.

Thanneermalai:
Even with B2B, you're going to have people because in areas like self-billing, the timing, they're going to get data points—they may not get all the data points in hand. There are a number of practical points. You know, there are rules here, there are so many rules here. If you look at the guides, there are rules here and rules there. So you will sometimes—it's little potholes that you can fall in. But luckily, nothing will happen to you. You just scratch and then come out of a scratch, that's it. Because as long as you go back and say, "I've done this mistake," be honest, be frank. I always believe in it, because if you're honest and frank, you build trust with the authorities and they will listen to you. Am I right, Dr. Rasyidah?

Dr. Rasyidah:
Yes, I mean, from our view, we know that taxpayers are actually trying hard to make sure that they comply, because based on our engagements, based on our discussions—including Mr. Thannee as well—we know that they also have two-way communication, two-way discussion.

Just now, I'm sure that maybe Mr. Thannee, you can confirm that for this implementation, it's not just an instruction from the authority side, right? We have discussions, we have dialogue on so many platforms so that we come up with more clarity. If we receive feedback from taxpayers or through associations, what we do is update the guidelines to give more clarification for them to have more understanding.

I agree that they also have a lot of treatments that they need to understand. But over time, once they get used to it, it will be a smooth transition for them. This is the first phase of the implementation.

Thanneermalai:
I want the audience to appreciate that it is impossible for IRB to anticipate all the niceties of each industry, each sub-sector. You see, I give you a difference: if you have a developer, he's receiving money in advance, he gives discounts, he gives all sorts—he's got a unique industry. If you go to the gold bullion dealers who are dealing with hundreds of transactions in a day, he can't be issuing an invoice for every document, so he does a consolidated—what is the format, etc.

Again, you go back: if you're dealing with the digital guys, the platforms, they've got bigger problems; you've got huge problems, because that is quite complicated because he's issuing the invoice on behalf of the merchant and then he issues an invoice to the customer. He's a middleman, you know.

Roshan Ganesan: He talks about the e-commerce platforms.

Thanneermalai:
E-commerce, like Lazada, Shopee, and the others who are selling things. So if you think about it, as they learn, the Inland Revenue, they will also modify their requirements all the time, because I can't expect Dr. Rasyidah to be an expert in mining one day, to be a digital expert, to be selling...

Dr Rasyidah: Well, you really know that, also together with the taxpayers.

Thanneermalai:
I really take my hat off to you because at the end of the day, you're only a human being; you cannot anticipate everything. You know, it is we who have to bring it to you.

Dr. Rasyidah:
Yeah, we understand that taxpayers are the ones who are really experts on their business processes. That's why if they cannot solve it with the general guideline or the specific guidelines, they come to us with samples in hand so that we can discuss, "This is the treatment that you need to do to implement this."

Thanneermalai:
But the question I have is, how many questions do you get? How are you dealing with the thousands of questions?

Dr. Rasyidah:
We have to, because this is our approach. We also anticipate that for some of the responses, we need to discuss first and come back to you. But as of now, since January, for the general email, we received more than 20,000 emails. In fact, for the helpdesk now, it can be up to 600 questions or queries per day, because we understand that the experience from taxpayers is different, the understanding is also different.

So as much as we can, we work together. We also need the advisors to assist, to give explanations for the taxpayers. So I'm sure that, again, this implementation is not just a one-way—it's a holistic approach, because it involves the whole business cycle as well. So any concerns, we can also assist from our side. Of course, this is our task, this is our main task. The last two weeks, I'm sure every one of us needs to be a helpdesk.

Thanneermalai: Well, you're having sleepless nights here.

Dr. Rasyidah: It's okay, for the good of the nation, we are willing to do that.

Thanneermalai: Good. Thank you.

Roshan Kanesan:
We're just two weeks away from the implementation of the new e-invoicing regime, and there are plenty of questions that businesses have, and we've covered quite a few of them during the course of this conversation so far.

There are a few more concerns to get into, of course, and we will do that. And helping us with this discussion is Dr. Rasyidah Che Rosli, Director of the e-Invoice Division of the Tax Operations Department at LHDN, as well as Thanneermalai, managing director of Thannees Tax Consulting Services.

We're not going to be able to get into all the concerns, of course, but we're going to get into some of the key ones. And Thannee, you made a point earlier to ask Dr. Rasyidah about a number of inquiries that LHDN gets.

Yeah, so there's a lot of volume here, and I think the key point to emphasise over the last, what has it been, 40 minutes now, is that there is a, we want to win together, we want everyone to be successful. So this is a transitionary period. We're not going to expect, we're going to be guns blazing on August 1st, although in good faith, you should be starting and getting things done. Mistakes will happen.

Speaking of queries, we do have a question that's come in. And it's a pretty long question here, but essentially what this listener is asking is about batch generation to upload a predetermined Excel template for batch generation of e-invoices. I'm sure this is something that a lot of people wondering about, Dr. Rasyidah. What can you tell us about this particular feature for the MyInvois Portal?

Dr Rasyidah:
Okay. Yeah, we're being asked about the batch upload is actually the submission to the MyInvois Portal. So just to share, our initial thought, when we want to develop this MyInvois Portal is for the taxpayer who don't have a system, or mostly for the small businesses. But again, we change our decisions because we want to give the assistance for the taxpayers because most of the large companies are looking into the API integrations. It's more practical for them, it's actually to use the API integration because of so many reasons, including the high volume of the transaction.

But now we open for all, for them to use our MyInvois Portal, whether they want to permanently use this MyInvois Portal, also can, because this one is the system, the portal that developed by LHDN for everyone. And also, if they want to use this as an interim, while their system are ready to make sure that they can have a integrations with LHDN and MyInvois system as well.

So yes, we mentioned to the taxpayer for those who don't have a system, maybe the best way to use the MyInvois Portal. It is up to the businesses, whether they want to input for each transaction and also to do the consolidated invoice. For the consolidated invoice, they need to input the receipt number, like for example, they also can have a line item or the multiple item. So that one is up to the businesses.

And the other functionalities is actually that we will provide to the taxpayer is batch upload. It is nice to have functionality. But for them to comply with the basic requirement is already there. So we will make sure that this batch upload will be ready before 1st August 2024. So through the batch upload, they can upload multiple transactions based on the Excel predefined format, which is we also will release it to the taxpayers. So that's the nice to have functionality, that we will provide.

Thanneermalai: I think the only concern, I think the rationale, I think this listener is having is, as you said, it's only two weeks.

Dr Rasyidah: Yeah, they also want to do the best thing.

Thanneermalai: But my advice is for the RM100 million people, most of them may not be using it.

No, but there are businesses like, for example, if in the oil and gas industry, if you are a branch, your numbers are very large, but the transaction volume is very, very small. Over RM100 million per year is nothing in the oil and gas. If I was a branch investing in a PSC, so they actually are sometimes late, they can do this using the MyInvois Portal where you have maybe 10 transactions a month, 20 transactions a month is not.

But majority of them in the RM100 million, in the 95%, 98% of the population will not be using this. But this will be more relevant for the January cases. It'll be more relevant for the January. But at the end of the day, I also want to warn the taxpayers. If you're going to use that, there is a danger that when you're migrating your information from your existing system, into the Excel sheet or the batching, errors can occur.

So I would ideally tell you, to not, that is my last option. It wouldn't be my first option. It'll be my last option.

But it can be an interim solution for those who are not ready yet.

But it is extra work only. So that's why it's coming in terms of that.

Dr Rasyidah:
But we can foresee that some of the businesses, if they're looking to do the batch upload also, and maybe they need to transfer the information. There's a danger. It could be considered as an additional work for them. But for us, as long as it is a comfortable mechanism, that can comply their business needs and also the requirements and compliance with this invoice requirement, so we allow them to use the mechanism.

Thanneermalai:
My only worry is you need completeness. Because otherwise, if they missed out anything, because there's a manual intervention on this, once you start bringing in manually interventions, there's a danger that numbers can be.

The other thing I want to do also clear the air with people is there is a misconception, also some people have it, that if you do not issue an invoice, you may not get a tax deduction for the expense.

Roshan Ganesan:
There is a question from the audience about TIN numbers again and how to get access to those numbers, but before we get into that, Thannee, you brought up a very interesting question before we went into the break about tax deductions. I think there is this fear that if it's not issued through an e-invoice, you can't use it as a tax deduction. I hope I interpreted the question correctly.

Thanneermalai:
No, you're absolutely correct. Absolutely correct.

You see, you've got to be careful. The penalty that is being imposed is actually on the fact that if you do not comply with the e-invoicing administration, that is if you don't. That's a different matter from the deductibility. As far as deductibility is concerned, the law has not changed. As long as I have legitimately received the goods and services, and I've received invoices, you are entitled to the normal deduction under the standard rules. So that doesn't change at all. Unless, of course, there's going to be changes in the coming budget, upcoming budget. Who knows? There may be changes saying you, I don't know.

But as it stands at the moment, I think taxpayers need not worry that their income will not be taxed or the deductions will not be given because you have not issued an invoice. So don't mistake that with the penalty that's been imposed to encourage you, the penalty is being actually done to encourage you to comply with the administration of the e-invoicing. Am I correct?

Dr Rasyidah:
Mr. Thannee brought up the most important issues and Mr. Thannee also, the one who will advise the client as well. So he is correct, because the e-invoicing is actually they have their measured implementation. So we just at the early stage of the implementation. The basic concept is, yes, we can see that moving forward, when we change the law, you will need to have an e-invoice for the purpose of the tax claims, and also for the tax expenses. Yes, you need to issue for each of these transactions.

But now, you are correct. We don't have the law yet, but the requirement for the supplier is in terms of the issuance of the invoice, issuance of the self-billed invoice, and also the consolidated e-invoice. So what we can advise now, of course, is the best if we can advise the taxpayer, they can issue for each transaction. Because the system was, if you can see from the system, why each transaction or consolidating invoice, it might be the same process, but of course, every business has their own challenges.

Thanneermalai:
The reason I'm raising this, Dr. Rasyidah, is for another 12 months, it's going to be incomplete, because we will have, as each group comes in, then at the moment, the RM100 million guys are going to receive invoices from those who are not in the e-invoice system.

So we are not going to deny them

Dr Rasyidah:
But they can issue the consolidated invoice, and as a buyer, there is no motivation yet for them to request for e-invoice, for the each transactions, let's say, equal to the groceries. Every item that you bought to the groceries, you want the invoice. That's not, I mean, that's also from your side need to provide the information. So for the groceries, maybe they can just issue the consolidated invoice, if there is a requirement, or maybe they also want to use invoice, they need to provide the information.

Roshan Ganesan: So in the longer term, yes.

Dr Rasyidah: It might be a change in the law.

Roshan Ganesan: There might be a change in law, e-invoicing may be the requirement to get you deductible.

Thanneermalai:
But by 1st July next year, if you think about it, the whole system is on. Everybody is on. Except those below the RM150,000.

Then, if changing the law accordingly, just fits in correctly. You've got to give the time. The law can be changed, and I'm not against it. I'm not against it.

But at this stage, you can't, at the moment, we will, most of the people who are receiving, we are receiving invoices from, there'll be majority who won't be in the e-invoice system.

Dr Rasyidah:
That's why at this early stage of this implementation, we know that there are challenges in terms of to collect the information. But over time, it involve with the change management. You know that change management cannot be perfect in D1. It takes time. Because there are different people, different understanding, different business model. But it should be improved over time.

Thanneermalai:
Well, definitely improve. I'm confident because the way you all are working it, and as long as we close all these bugs that are coming up, and you're getting 600 questions. Close it in. 99.9% by next July, you'll be okay. 0.1, you're not God. You will make. You will also not be perfect.

Dr Rasyidah:
No, we work together with the... I mean, like for me, with the policy, with tax authority, with the taxpayer, definitely we work together to ensure that everyone will go into it.

Thanneermalai:
No, we also... I'll give you a commitment. I was a former president at the Institute and everything else. And I can speak on behalf of many of the people here in the profession. We are here to also, help you. You know, it's a two-way thing because we help you and I think we help our businesses. Everybody benefits.

Roshan Ganesan:
To wrap up today's conversation. Because again, we could go on forever, I believe, here. And there are plenty of issues to cover.

Now, another issue that was brought up by the listener just now was again, getting the information needed. Because I've heard... There's not from this listener, from other folks in the industry as well that asked when... The response they often get when they say, hey, can I have your TIN for the taxpayer identification number for the issuance of the e-invoices? Along the lines of, don't ask me, I'm not going to tell you. This is a PNC. I don't want to share this information.

So, this is something I've heard. Maybe there is a miscommunication here. Maybe there are people are being overly protective of their TIN numbers and the data. So, how do we navigate this going forward? So, that again, everyone wants the successful implementation of e-invoicing. How do we navigate this particular point?

Dr Rasyidah:
Okay. Yeah. We mentioned that one of the requirements, the mandatory requirement, if we want to issue the invoice for the individual transaction, you need to get the TIN number for both the supplier and also the buyer. But, we always advise the taxpayer you can go to the MyTax to get your TIN number. It's actually one time for them to remember that they can keep in the record in the systems that the TIN number.

But, I think from our side, at this early stage of the implementation, I always emphasise that at the early stage of the implementation, we also give a concession, especially when it comes to the transactions with the buyer, they can use either the IC number, if they don't know the TIN number. So, they have an option for them.

So, that we provide to the guidelines, how they're going to record, if the buyer only gives the IC number, so those are the things that we provide, we try to assist the taxpayer, and we provide the concession for the taxpayer until they get to formalize into the system. And again, if you don't get the information, you still can issue the concession in the invoice using the general TIN.

Thanneermalai:
No, I think we have to comfort the taxpayers that IRB, whatever information you give, they cannot disseminate. This varies, from 1967, there is a special rule with IRB. Whatever information given to them, should be confidential and private.

Dr Rasyidah: We need to protect the taxpayer information, including us here.

Thanneermalai:
They cannot share it amongst even themselves. That is the cardinal rule. Only exception that has occurred now, is now they are now sharing all the information with Customs. So, that's another issue we can have a talk, another day the implications of that. There are serious implications on that. You know, but they are sharing.

And the only other time they share is if they are caught under AMLA, the anti-money laundering rules, or if there is severe fraud. Otherwise, IRB is one of those agencies, absolutely clear that they cannot suppose to share any information given to them. That is a cardinal rule.

But with regards to TIN, it's also wrong to say that TIN is so secretive, when you go to the bank, when you go to all of them are now asking, when you do KYC, know your customer, when you do the FATCA declaration, all of them are asking TIN numbers. So, the TIN number is not exactly. It's a number that every country, everywhere you go, they are asking you for your TIN number. Without the TIN number, you cannot do local transactions in many cases, and also international transactions in many cases.

Dr Rasyidah:
It goes back to the change management process.

Yes, because other countries that implement, they also make it mandatory to have the TIN number. And in fact, the TIN number is longer than the identity number as well.

Thanneermalai:
Absolutely. This is not Malaysia. Every country. You go to Singapore, you go to India, you go to China, you go to UK, anywhere everybody is asking. If you do anything, they want a TIN number. So TIN numbers are not, I mean, it's secretive, but it's not that secretive. It's providing it to your buyer, to your supplier, shouldn't be an issue.

And it's going to be the number that the world is looking everywhere. Now there is a standard TIN number, everybody is asking. So that's how they share information also, because that's how you catch the culprits in the world, because there's a linkage. That's all part of data mining for the good of the world.