Kota Kinabalu: Warisan Vice President Datuk Junz Wong called for the e-invoicing exemption threshold to be raised to RM2 million in annual sales for Sabah’s small and medium enterprises (SMEs), saying business conditions in the state differ significantly from those in peninsula.
Welcoming the Federal Government’s decision to exempt businesses with annual sales below RM1 million from e-invoicing, Wong said the threshold remains insufficient for Sabah due to persistent infrastructure shortcomings, higher operating costs and a fragile SME ecosystem.
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“Sabah SMEs are not against digitalisation. What we are asking for is fairness and policy calibration that reflects on-the-ground realities,” he said.
Wong said many areas in Sabah continue to face unreliable electricity supply, weak internet connectivity and poor road infrastructure, particularly in rural and interior regions.
He said frequent power outages, unstable telecommunications services, floods and landslides regularly disrupt business operations, making digital compliance risky and impractical for small businesses.
“In areas with inconsistent electricity supply, businesses cannot reliably operate computers or submit e-invoices. Sudden outages can result in data loss or hardware damage, and SMEs may face penalties for circumstances beyond their control,” he said.
He added that Sabah’s geography and underdeveloped transport infrastructure significantly increase logistics and operating costs, placing local SMEs at a structural disadvantage compared to businesses in West Malaysia.
Wong also noted that many Sabah SMEs operate as sole proprietorships or small partnerships with thin profit margins. The shift to e-invoicing would require additional spending on software, hardware, system maintenance, training and manpower.
“For many rural and micro-scale SMEs, these costs are simply unaffordable. Skilled manpower is limited, outsourcing is not viable and high staff turnover adds to the burden. Ultimately, these costs will be passed on to consumers, worsening the cost of living in Sabah,” he said.
He cautioned that Sabah remains among the poorest in the country, with high unemployment and an SME sector that forms the backbone of the state’s economy. Imposing e-invoicing on SMEs earning below RM2 million annually could lead to business closures, job losses and negative spillover effects on related industries.
“If we want to grow Sabah’s economy, SMEs must be given room to stabilise and scale up. Premature compliance costs risk pushing viable businesses into losses,” he said.
Warisan, Wong added, is calling for a more flexible and business-friendly implementation approach that reflects Sabah’s development stage, stressing that e-invoicing should not be imposed on SMEs with annual sales below RM2 million until infrastructure and digital readiness improve.
“This is not about rejecting reform, but ensuring policies are realistic, inclusive and equitable,” he said.
