MOF Postpones e-Invoice For Businesses Below RM5 Million To Jan 1, 2026
The government has announced the rescheduling of its e-invoicing implementation for businesses with annual income below RM5 million, stating that it acknowledges the need for sufficient preparation time and other constraints faced by taxpayers, particularly Micro, Small, and Medium Enterprises (MSMEs).
The Ministry of Finance has decided that taxpayers with annual income or sales below RM500,000 are currently exempted from e-invoicing implementation.
The e-invoicing implementation by phase for taxpayers with annual income or sales exceeding RM1 million up to RM5 million is postponed to January 1, 2026.
The e-invoicing implementation phase for taxpayers with annual income or sales up to RM1 million is postponed to July 1, 2026 Related
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The Star
40 minutes ago
- The Star
SST better suited for post-pandemic economy
MALAYSIA'S upcoming implementation of the revised Sales and Service Tax (SST) on July 1 has reignited public concerns over possible increases in the cost of living and inflationary pressures. Memories of the Goods and Services Tax (GST) era remain fresh, raising questions about whether the new SST model will be more sustainable or merely a repeat of the past. However, tax experts say the SST, in its current form, offers a more targeted and less burdensome approach — particularly for lower- and middle-income households. According to Malaysian Association of Tax Accountants (MATA) deputy president Dr Mohd Fairuz A Razak, unlike GST, the SST is not imposed at every stage of the supply chain. 'GST was a multi-stage tax, which affected almost every level of transaction — even basic goods — unless they were zero-rated,' he said. 'In contrast, SST is a single-stage tax, typically applied at the manufacturing or service-provider level. This avoids the risk of cascading taxes or 'tax-on-tax' scenarios.' Mohd Fairuz noted that SST is not imposed on most essential items such as rice, vegetables, fish and medication, offering greater relief for households in the B40 and M40 groups. 'For example, items like sanitary pads and soap, which were previously taxed under GST, are now exempt under SST. This has a direct impact on household spending and cost-of-living management,' he said. The simplified structure also helps stabilise retail prices, as goods are taxed only once in the supply chain. In addition to being consumer-sensitive, the SST system is seen as more friendly to small and micro businesses. 'The registration threshold for SST is RM500,000 in annual turnover. This means many micro and small enterprises, especially those just starting out, are not required to register or collect taxes,' Mohd Fairuz explained. This, he said, helps reduce compliance costs and complexity for small vendors, especially those operating in night markets, roadside stalls, and informal sectors. 'SST also eliminates the need for complex accounting systems. Small businesses can rely on basic bookkeeping, without investing in expensive ERP or tax software,' he added. This simpler compliance structure, he said, gives confidence to small traders to formalise their operations without fear of burdensome regulations. Mohd Fairuz also highlighted how SST places more emphasis on discretionary or luxury items, rather than daily essentials. 'Luxury bicycles, imported fruits, salmon, five-star hotels, insurance and entertainment services are among those that will be taxed. These are typically consumed by higher-income groups who can afford to pay more.' 'This approach is more equitable and aligns with the principle of progressive taxation,' he said. From a broader perspective, the reintroduction and expansion of SST is part of a larger fiscal reform agenda, one that aligns with Malaysia MADANI's core values of compassion (ihsan), responsibility, and justice. Mohd Fairuz said the SST structure encourages wealthier Malaysians to contribute more to national revenue, while ensuring that vulnerable groups are not unduly affected. 'It is a more socially conscious tax model. While GST might have generated more revenue, SST strikes a better balance between collection and citizen well-being—especially in a post-pandemic recovery period,' he said. He also pointed out that SST is easier to monitor and less susceptible to fraud, due to its simpler design. 'Revenue collected can go directly into funding targeted subsidies, public healthcare, education and infrastructure.' While SST may not bring in as much revenue as GST, Fairuz argued it is a more sustainable tool for long-term fiscal management. Looking ahead, he said there's still room for improvement. 'The government should continue exempting essential goods, while synchronising SST with digital systems like e-invoicing to enhance transparency.' 'There's also a need to review SST thresholds and rates periodically and consider introducing limited input tax credits for certain industries.' Ultimately, he added, taxation systems should be designed not just to raise revenue — but to serve the people. 'When implemented with care, SST can be a key fiscal instrument rooted in Madani values — fair, transparent and people-centric.'
New Straits Times
an hour ago
- New Straits Times
Mismatch widens as housing supply overlooks majority demand
KUALA LUMPUR: The supply of residential properties in Malaysia continues to diverge from actual demand, with developers favouring mid- to high-end units while most Malaysians, particularly those in the B40 and M40 income groups, struggle to afford suitable housing. Dr Suraya Ismail, Director of Research at Khazanah Research Institute (KRI), said this supply-demand imbalance has led to a growing number of unsold units and limited options for lower-income buyers. "This raises a crucial question. Are Malaysians being presented with a clear and transparent view of the actual state of the property market?" Despite evident signs of oversupply, especially in the Klang Valley, developers are still launching new projects at a steady pace, she said. Current data shows a substantial volume of completed but unsold properties, mainly in the mid- to high-end segment, such as serviced apartments and condominiums in urban centres, she told Business Times. Suraya noted that developers, often backed by strong financing or public-private partnerships, remain confident in long-term market corrections or sustained demand. But she questioned whether such optimism is justified in light of persistent affordability issues. According to her, Malaysia's housing market is suffering from a mismatch between effective demand, defined as what households can afford, and the type of housing being supplied. While prices have risen steadily over the years, they've outpaced income growth, making homes unaffordable for a significant share of the population. The Real Estate and Housing Developers' Association Malaysia (Rehda) declined to respond to questions sent by Business Times. Meanwhile, Suraya said that despite an evident glut in the higher-end segment, housing supply continues to target the top income groups. For example, in 2022, Malaysia's affordable median house price was RM228,168, three times the median annual household income. Yet, only 10.7 per cent of new launches were priced below RM200,000. In contrast, units priced above RM500,000 made up 24.7 per cent of launches in 2022 and rose to 39 per cent in 2023. Between 2020 and 2023, most transactions, 709,283 units, were for homes priced below RM500,000. Properties under RM300,000 made up 56.2 per cent of total sales, highlighting strong demand in the affordable segment. Suraya noted that a closer look at 2023 sales and overhang data reveals the same pattern. Units priced below RM300,000 accounted for 53 per cent of total sales. Yet of the 25,816 overhang units recorded in the fourth quarter of 2024 (Q4 2023), 70.6 per cent were homes priced above RM300,000. "This suggests a strong demand for affordable housing following the population's income brackets, while higher-priced properties encounter challenges in finding buyers. The data highlights the struggle of higher-priced units to attract buyers, resulting in a higher share of overhang," she said. Suraya added that the market has consistently scored above 3.0 on the housing affordability index, signifying 'seriously unaffordable' conditions. Between 2012 and 2014, the median house price rose from RM170,000 to RM270,000 at a compound annual growth rate (CAGR) of 23 per cent, while household income grew at less than half that rate, only 11.7 per cent. "In high-density areas like Kuala Lumpur, Selangor, and Johor, many developments are struggling to sell remaining units. This trend highlights a growing mismatch between supply and actual demand, especially in an environment of stagnant wage growth and tighter lending rules. As stated earlier, the supply is not catering for the realities on the ground. Why, then, are new project approvals continuing unabated? "Approvals are given at the state level and local municipal councils, but there is a gap in the information for the efficient coordination of house prices and the general affordability of the local populace. This could be assisted if developers could give an indication of the feasibility of sales for their plot of land, whether it caters to effective demand, that is, the pricing threshold that the local population could afford, or not exacerbating the glut of supply (overhang and unsold units) within the area, for the approval of development order (DO)." While official NAPIC figures highlight the growing property overhang, defined as units completed but unsold for more than nine months, Suraya cautioned that the problem may be larger than reported. "Are we only seeing the tip of the iceberg? Well, it can be an underestimation," she said. Rethinking property investment: Is it still worth it for Malaysians? With evolving market dynamics, rising rental risks, and slowing capital gains, many are questioning whether property remains a sound investment for the average Malaysian. Suraya pointed to a growing rental supply in areas like Mont Kiara, Bangsar South, KL Eco City, Subang, Shah Alam, and Cyberjaya. Tenants now hold the upper hand, while landlords often accept rental yields below their mortgage costs, a sign of deeper market weaknesses, she said. She cautioned against the practice of setting rental rates solely to cover mortgages, calling it a strategy used by speculative rather than professional landlords. "Rental yields should not be pegged to cover mortgage costs. This is normally practised by speculative landlords, not professional landlords. Speculative landlords artificially inflate the rental market by wanting to cover their mortgage payments, rather than deriving the price of rentals based on the liveable conditions of the homes supplied," she said. She noted that in any mature market, rental trends serve as a litmus test for real demand. Units that can't fetch viable rental rates often reflect oversupply, pricing mismatches, layout inefficiencies, or poor supporting infrastructure. "We must find a way to extract more information about rental prices for analysis. One method is to formalise the rental market with a Rental Tenancy Act. Then, we can access and monitor the rental market to protect the interests of landlords and tenants," she said. She also raised concerns over Joint Management Bodies (JMBs) enforcing "minimum rental rates" to preserve property values, a practice that, while legal, can distort real demand and limit affordability. While framed as a move to preserve property value, critics argue this amounts to cartel-like behaviour that artificially props up prices, hurting owners who need rental income and distorting market signals. "If such practices are indeed happening, they obscure the true softness in rental demand and delay the price corrections needed to make properties accessible to genuine end-users. What are the implications for prospective buyers, investors, and policymakers? "Unfortunately, the values or the opportunistic behaviour of people become institutionalised in the JMB's house rules. That is the democratic disadvantage of consensus, as stipulated in the Strata Act, because it calls for voting on any house rules, and the majority wins. "Currently, most collective actions are for profiteering and not catering to individual plights nor the common good of the less advantaged in the group. Such is the state of our value system. However, distressed individual unit holders could try to negotiate the house rules of the majority by invoking their claim on property rights to the COB." To address the oversupply of high-rise units that fail to match demand, she urged the Housing Ministry (KPKT) to monitor the market using robust housing indicators, such as rent-to-income and price-to-income ratios. "Housing is viewed as both an asset and a shelter. If housing is viewed as an asset-based income, then the CAGR of household wages will never be commensurate with the rapid price escalation of housing as an investment. Therefore, slower capital appreciation is good for the general affordability of all first-time home buyers. She highlighted the conflicting interests in the market, between homeowners, investors, professional landlords, and those seeking affordable shelter. Indicators like the rent-to-income ratio are vital for shaping targeted policies, such as when and how to transition people from public to private rentals. Suraya stressed the importance of promoting both renting and ownership as viable choices but warned that affordability must come first. Speculative activity, particularly in the mid-income housing segment, is damaging the market's long-term sustainability, she said. Suraya said tackling the growing imbalance in the property market requires inclusive dialogue among all key stakeholders, including KPKT, local councils, town planners, Rehda, the National House Buyers Association, the National Property Information Centre (Napic), auctioneers, secondary market specialists, economists, and urban policy researchers. "It is not about who leads and who adopts, but more about building a consensus for the overall 'collective or common good'. This might mean that we need to seriously discuss the housing sector's objectives for all types of diverse interests." Is the property glut worse than it seems? While NAPIC data reports tens of thousands of unsold completed units, the figures fall short of capturing the full extent of Malaysia's housing oversupply, according to Tan Wee Tiam, executive director of Olive Tree Property Consultants. Notably absent are under-construction units with little buyer interest, also known as "shadow inventory", and vacant purchased units that remain unoccupied, adding to supply without meeting real housing needs. Tan noted that the overhang is largely concentrated in the RM500,000 and above segment, far beyond the affordability of most Malaysians. Meanwhile, genuine demand persists in the sub-RM300,000 range, but these affordable units often lack adequate connectivity, infrastructure, and amenities. Aggressive sales tactics, such as rebates, furnishing packages, and deferred payments, may artificially boost take-up rates, masking the true health of the market and distorting price signals, he told Business Times. "Napic data merely gives macro data on the overhang figures and value. We believe it is more useful for Napic or another centralised data centre to collate data on all the sold units when a caveat is lodged, buyers nationalities and other essential information. "Prices, type of property, built-up area, etc., will be crucial for developers and the prospects to better understand the true picture of the property market in a timely manner. Identities of the vendors and purchasers should be provided so that we can know whether they are related party transactions," he said. Tan said that disclosing buyer nationalities can shed light on the real extent of foreign interest, helping distinguish genuine international demand from market hype. Furthermore, he said that understanding whether units are owner-occupied or investor-held (and possibly left vacant) is vital for assessing true occupancy trends. Such transparent, granular data would not only enhance market insights for developers and policymakers but also empower buyers and investors to make more informed decisions in an increasingly opaque landscape, he said. Tan believes that property is still a viable investment for the average Malaysian. He said that property has long been regarded as a cornerstone of wealth creation in Malaysia, but evolving market dynamics have raised critical questions about its viability for the average investor. He noted several factors reshaping the landscape. "Wages haven't kept pace with rising home prices. Malaysia's median house price is now about five times the median annual income, well above the affordability benchmark of 3.0. Persistent oversupply in the mid- to high-end segment has led to depressed rental yields, often in the range of just 2 per cent to 4 per cent, which may not even cover mortgage repayments and maintenance costs. "Tighter lending conditions and rising interest rates have further limited access to home financing, especially for younger and lower-income groups. As a result, many younger Malaysians are diversifying into alternative investment avenues such as Real Estate Investment Trusts (REITs), exchange-traded funds (ETFs), and digital platforms offering robo-advisory services, which often promise better liquidity, lower entry costs, and less risk exposure." Still, he said property investment is not entirely off the table. It remains a viable long-term asset class for those who conduct careful due diligence, understand demand patterns and local market conditions, adopt a realistic investment horizon, and are prepared to start small and scale up gradually. Tan noted that timing also plays a critical role.
New Straits Times
an hour ago
- New Straits Times
MRCA urges government to reconsider 8pct SST on retail rents
KUALA LUMPUR: One of the country's largest retail groups, whose members employ over 400,000 people, has called on the government to consider a further review of the eight per cent Sales and Service Tax (SST) on commercial rentals. This comes after the Finance Ministry announced an increase in the Service Tax registration threshold for commercial rentals from RM500,000 to RM1 million. Malaysia Retail Chain Association (MRCA) vice-president Dr Afendi Dahlan said while they welcomed the revision, as it would help many micro, small and medium enterprises that fall within this range, there were concerns for other players. He said businesses already faced higher overheads due to the rise in the minimum wage from RM1,500 to RM1,700, the rationalisation of diesel subsidies, higher electricity tariffs, e-invoicing and Employees Provident Fund contributions for foreign workers, among others. Afendi said rental was among the key costs for any retailer, accounting for up to 20 per cent of total costs. "Rent in a big mall can be more than RM50,000 a month and an eight per cent SST would amount to RM4,000 per outlet," he told the New Straits Times. Afendi said MRCA represented 550 members who collectively operate 44,000 outlets. "Some of our members have 200 outlets, so you can imagine how much the SST on rentals will cost them for all these outlets." Afendi said while MRCA understood the government's desire to expand the tax base, the timing was not good for retailers, particularly since sales had dropped and other costs had risen. He said MRCA was especially concerned for its struggling members. MRCA, he said, hoped that the government would consider postponing the SST on rentals or reduce the rate to two per cent. He added that MRCA, along with five other retail associations, had also proposed that the threshold be increased to RM2 million to ensure businesses remain sustainable. Prime Minister Datuk Seri Anwar Ibrahim has said revenue from the SST will be used to improve schools, assist the poor and support public hospitals, among other initiatives. By Robin Augustin
