VIP Guest The Prime Minister’s recent 2026 New Year address has signaled a critical shift in the government’s approach to national development: a shift toward pragmatic reform. For the leaders of Malaysia’s micro, small, and medium enterprises (MSMEs), the announcement of the e-invoicing postponement and the reduction of rental service tax is more than just a policy adjustment—it is a clear acknowledgment of the operational realities on the ground.
As the CEO of Axaipay, I have stood at the intersection of fintech and entrepreneurship for years. From this vantage point, I believe these reforms are exactly what the Malaysian business ecosystem needs to ensure that “digitalization” does not become synonymous with “financial distress.”
Easing the Digital Transition
The decision to delay mandatory e-invoicing for companies with annual sales between RM1 million and RM5 million is a masterstroke of common sense. While the long-term benefits of a transparent, paperless tax system are undeniable, the immediate costs—ranging from software integration to specialized training—are a heavy burden for businesses still recovering from global economic volatility.
By extending the transition period without penalties, the government is prioritizing readiness over rigidity. It allows the Inland Revenue Board (LHDN) and industry players more time to refine the infrastructure, ensuring that when the switch finally flips, it is a smooth transition rather than a disruptive one.
Collaboration Over Compliance
At Axaipay, we recognize that our role in this transition is pivotal. While our core payment solutions are focused on transaction security and speed, we understand that merchants need a unified digital experience.
This is where the power of the ecosystem comes in. We have spent the last year strengthening our partnerships with Point-of-Sale (POS) providers and shopping cart providers who have integrated e-invoicing directly into their hardware. This means that when an MSME uses Axaipay through an integrated partner, they aren’t just taking a payment; they are future-proofing their tax compliance. This extra year of “breathing room” allows us to work with more merchants to get these integrated systems in place affordably.
Injecting Liquidity Where It Matters
Furthermore, the reduction of the service tax on rental services from 8% to 6% (and the full exemption for MSMEs below RM1.5 million in sales) is a high-impact move. Rental is often the largest fixed cost for a small business. A 2% reduction may seem small on paper, but in the world of tight margins, it is a vital injection of cash flow. This is capital that can now be diverted toward hiring, inventory, or indeed, the very digital tools the government wishes to promote.
The Path Forward
We applaud the Prime Minister Datuk Seri Anwar Ibrahim and the Cabinet for their willingness to listen to the business community. These measures prove that the MADANI framework is not just a high-level philosophy, but a practical roadmap that values the survival and growth of the “little guy.”
The destination remains a fully digital Malaysia. But by taking a measured, collaborative approach, the government is ensuring that no entrepreneur is left behind in the race toward 2030.
*This article is contributed by Dr. Terry Yee, CEO and Founder of Axaipay, a leading Malaysian payment solution provider dedicated to empowering MSMEs through secure and innovative fintech solutions.