As of January 5, 2026, there have been significant updates from the Prime Minister.

Here is the breakdown of what the Prime Minister actually said:

1. E-Invoicing: Deferment for Businesses up to RM5 Million
On January 1, 2026, Prime Minister Anwar Ibrahim announced a further postponement for mid-sized MSMEs.

• The Announcement: Businesses with annual sales between RM1 million and RM5 million (originally supposed to start today, Jan 1, 2026) have been granted another year’s extension.

• New Deadline: They are now expected to comply by January 1, 2027.

• The Reason: The PM noted that many businesses are “not yet ready” and cited the high cost of preparation as a primary concern.

2. E-Invoicing: Permanent Exemption for Sales below RM1 Million

In December 2025, the government officially raised the permanent exemption threshold.

• The Rule: Any business with annual sales below RM1 million is now fully and permanently exempted from the mandatory e-invoicing requirement.

• Previous Rule: This threshold was previously RM500,000, but the PM doubled it to RM1 million to protect micro-enterprises.

3. Service Tax (SST) Threshold: The RM1.5 Million Figure

The RM1.5 million specifically relates to the Service Tax (SST) on rental and specific services:

• Rental Services Exemption: PM Anwar announced that the threshold for MSMEs to be subject to service tax on rental services has been raised to RM1.5 million (up from RM1 million).

• Meaning: If your MSME’s total annual sales are below RM1.5 million, you are exempted from paying/charging service tax on rental or leasing services.

• Other Sectors: A similar RM1.5 million threshold applies to the Construction and Private Healthcare sectors for SST registration.

I believe more news and clarity will be announced soon and we will keep you informed as we receive the latest updates.