Car sales shouldn’t be affected by implementation of e-Invoicing, but full loans will have to stop – Zafrul

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Car sales shouldn’t be affected by implementation of e-Invoicing, but full loans will have to stop – Zafrul

The ministry of international trade and industry (MITI) has said it does not expect the implementation of the e-Invoicing system (beginning August 1, 2024) to impact overall total industry volume (TIV) or vehicle sales.

“I have discussed with the Malaysian Automotive Robotics and IoT Institute (MARii) and we think there will be no impact with the implementation of e-Invoicing. There may be some annoyance among small companies considering it will involve systems they need to have,” said MITI minister Tengku Datuk Seri Zafrul Abdul Aziz, as reported by Berita Harian.

“If we look at the timeline, the Inland Revenue Board of Malaysia (LHDN) and the ministry of finance (MoF) have informed we will start [with e-Invoicing] with companies with income or revenue exceeding RM100 million,” he added.

Zafrul pointed out that most vehicle dealership companies do not earn revenue exceeding that amount, so there is little impact to them. However, he did say there are a few dealerships who offer full loans for vehicles, which is a practice that is set to go away with e-Invoicing coming into effect.

Car sales shouldn’t be affected by implementation of e-Invoicing, but full loans will have to stop – Zafrul

We’ve covered the topic of e-Invoicing and how it can potentially impact full loans offered by dealers to car buyers. The new system is aimed at ensuring accuracy, in that the amount stated in all relevant invoices match with one other, thus preventing the practice from happening.

In a full loan scenario, buyers aren’t required to pay the usual 10% downpayment in a 90% hire purchase loan. Instead, the sales agent marks up the price in the invoice when submitting a loan request to the bank, so that the approved loan amount matches or exceeds the actual price of the car.

After this, the sales agent could submit an invoice with a different amount to the government – this is the omission of information that the e-Invoicing system is supposed to prevent. With e-Invoicing, all invoices must go through LHDN, so the SA can’t simply mark up an invoice as the numbers on all other invoices must tally.

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