Finance Ministry says e-invoices, though unpopular, are necessary to rein in shadow economy

PUTRAJAYA, Aug 18 — The Ministry of Finance has acknowledged that certain policies, including e-invoicing, are unpopular but essential for reducing the shadow economy. Minister Amir Hamzah Azizan defended the policy, stating it is vital for the country's long-term economic growth and prosperity. However, the implementation of e-invoicing has faced criticism from small businesses due to its complexity, high costs, and the burden it places on daily operations.

The shadow economy in Malaysia is estimated to be between 21% and 30% of the GDP, translating to an annual value of RM300 billion to RM330 billion. Despite the resistance, the phased introduction of e-invoicing is seen as a crucial step towards transparency and reducing the informal economy.