KUALA LUMPUR, Oct 2 (Bernama) -- The RAM Business Confidence Index (RAM BCI) rose to 48.4 in the third quarter (3Q) of 2025, compared to 40.0 in 2Q, reflecting a notable improvement in business sentiment for the upcoming three months.
RAM Holdings Bhd said in a statement today that the rebound in the overall index was broad-based, with all sub-indices improving quarter-on-quarter except for the hiring sub-index.
"While the improvement from the trough in 2Q suggests some relief in business pressures, the index remains below the neutral threshold of 50, underscoring lingering caution among firms surveyed.
"The recovery in sentiment is consistent with easing global trade uncertainties following the conclusion of the US-Malaysia trade deal in early August," said the rating agency.
According to RAM, the implementation of e-invoicing and the expansion of the Sales and Service Tax (SST) were identified as the most significant measures, especially for small and medium enterprises (SMEs).
About 37 per cent of firms ranked e-invoicing as the top challenge, while 34 per cent pointed to the SST expansion. Revisions to the electricity tariff structure were also highlighted, though to a lesser degree, as most firms ranked it at number three or four in terms of impact.
"Minimum wage hike and diesel subsidy removal were seen as the least burdensome of the five measures assessed," it added.
RAM Holdings group chief executive officer and executive director Chris WK Lee said fiscal reforms such as e-invoicing and the expansion of SST are crucial steps to strengthen Malaysia’s revenue base.
"However, our survey findings show that businesses, particularly SMEs, are struggling to transition and adapt to the new regulatory environment
“As we head into Budget 2026, it will be important for policymakers to strike a balance between broadening the tax base and supporting business resilience, which will be key to lifting business confidence and sustaining Malaysia’s long-term competitiveness," he said.
The five business aspects surveyed are turnover, profitability, hiring, capital investment and capacity utilisation.
-- BERNAMA
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