Budget 2025: Finexus Believes e-Invoicing Will Propel MADANI Reforms

The Ministry of Finance recently announced that 7,400 companies have adopted the e-Invoice system, issuing 58 million e-Invoices as of Oct 14, 2024.

Although this group represents just 0.5% of 1,532,542 registered companies in Malaysia, it likely includes the country’s largest firms with over RM100 million annual revenue each, due to their earlier e-Invoice implementation timeline.

“Finexus Group remains dedicated to supporting the MADANI Government's Budget 2025 by facilitating the digitalisation of tax collection and financial reporting through e-Invoice implementation for the remaining 95.5% companies.

“Moreover, with MSMEs accounting for 96.9% of overall establishments in Malaysia in year 2023, we also look forward to enable all MSMEs to implement e-Invoicing with our AREMA e-Invoicing solution to propel the MADANI reforms,” said Clement Loh, Group CEO of Finexus highlighting its AREMA e-Invoicing middleware, pay-per-use web portal, and retail POS e-Invoicing solutions for walk-in customers. 

In line with this, the Fiscal Outlook 2025 underscores tax revenue as a primary contributor to total revenue in 2024, projected at RM241 billion or 74.8% of total revenue. 

Looking ahead, tax revenue is expected to remain a major revenue source in 2025, reaching RM259 billion and accounting for 76.3% of total revenue, or 12.4% of GDP. 

One of the reasons cited for the increase in tax revenue collection is e-Invoicing, which offers transparent and detailed visibility into company transactions, effectively preventing tax evasion and revenue leakage.

Additionally, e-Invoicing facilitates the monitoring of illicit business activities and shadow economy by tracking the income and expenditures of business owners and employees.

With e-Invoicing implemented as well, various government agencies can leverage this system to enhance their investigations into money trails.

Governmental bodies dedicated to combating money laundering, terrorism financing, and proliferation financing of mass destruction weapons (ML/TF/PF) can also utilise e-Invoicing to gain visibility into money movements. 

Following transparent revenue collection through e-Invoicing, the government has also taken measures to establish strong governance in budget spending.

For example, Budget 2025 allocates RM60 million to empower judiciary as an independent body, and RM180 million to uphold the independence of the Parliament institution with a portion dedicated to the Public Accounts Committee for check and balance. 

To encourage companies to implement e-Invoicing by July 1, 2025, the government has also proposed on Oct 18, 2024 to reduce initial capital allowance for ICT expenditure to 20% (from 40%), and increase annual capital allowance for ICT expenditure to 40% (from 20%), from 2024 to 2025 assessment years.

This ICT expenditure would include the purchase of ICT equipment, computer software packages, related consultancy fees, licensing, and incidental payments related to customised software development.

For more information on Finexus AREMA e-Invoicing, visit https://www.finexusgroup.com/arema/

This content is provided by Finexus Sdn Bhd.

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