Source: The Sun
What is e-invoicing?
E-invoicing is the exchange of an electronic invoice document in a structured data format between the supplier and the buyer, which allows for its automatic and electronic processing. It should be recognised for tax, legal and contractual purposes, and the appropriate laws have to be amended to accommodate e-invoices as valid documents.
Why e-invoicing?
The biggest benefit will be the improvement of compliance and it will help the tax authorities in tackling the issues of the shadow economy which results in a huge leakage in taxes. Taxpayers involved in the shadow economy/black economy (those who do not pay their taxes) are a burden to the good taxpayers who are bearing their share of the taxes.
E-invoicing will also bring in greater transparency to the tax authorities and this will result in savings to both parties: tax authorities can save time by eliminating the auditing of e-invoices, and taxpayers need not incur time attending to tax audits.
There will also be additional savings to taxpayers in the form of data storage and management costs since there will not be a requirement to keep such documents as the burden has been passed to the tax authorities.
Will taxpayers incur additional costs?
There will be a one-time cost at the introduction of the e-invoicing system because there will be a need to incur time and costs to modify the current digital infrastructure within businesses to synchronise with the requirements of the tax authorities. After the introduction, the benefits of e-invoicing through the time saved in dealing with manual data will be far greater in the long run.
E-invoicing should be introduced in stages and our view is that it should start in the “government-to-business” segment and the top 500 companies. This should cascade down over a period of time to the other businesses, and lastly, to the sole proprietors.
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