NA deputies want to keep household businesses out of enterprises law

A household garment store in Lao Cai City, Lao Cai Province. - VNA/VNS Photo Quoc Khanh

According to deputies, household business is a different form of business so it is not suitable to make those businesses comply with the Law on Enterprises.

Household business is regulated in Chapter 7a of the revised Law on Enterprises. If the revised law is passed by deputies, it would only solve problems with the State management of household businesses.

The revised law may increase risks and costs for household businesses and there are no rules that help improve the freedom, environment and security for household businesses and protect their rights and benefits.

According to the Vietnam Small- and Medium-Sized Enterprises Association, there are now 5.5 million household businesses. Their total assets are worth VND655 trillion (US$28.17 billion), total revenue is estimated at VND2.2 quadrillion and tax payments are worth VND12.36 trillion. Such businesses employ nearly 7.95 million people.

It may take lawmakers some time to assess the impact of the law on household businesses before legalising this form of business because there are still many problems with defining a household business.

Nguyen Dinh Tue, Director of Small- and Medium-sized Enterprise Support Centre at the HCM City Enterprises Association, said the concept of household business should be studied more.

State agencies license individuals, not their households, he said, adding the lawmakers should know whether an individual or their household is held accountable to the law.

Duong Minh Tuan, a delegate from Ba Ria-Vung Tau Province, said as a separate form of business, household businesses must be bound to a law instead of a decree – which is a sub-regulation of a law.

Issuing a new law on household businesses would help the Government improve the management of the business form while increasing the quality of those businesses, he said.

The scale and operation of a household business are very different from a normal company, deputy Tran Van Tien from Vinh Phuc Province said.

If the policymaking process is not appropriate, millions of household businesses will be hurt and a new law will be needed to supervise them, he said.

According to Minister of Planning and Industry Nguyen Chi Dung, legalising the role of household businesses in the revised law will help the community gain benefits and access support programmes.

Household business, when regulated in the revised Law on Enterprises, will see barriers and administrative procedures cut and the private sector will develop, he said.

“The law will encourage households to develop into private companies if they are capable,” the minister said.

Under existing regulations, a household business can only employ a maximum of 10 workers. However, some have recruited hundreds of workers and recorded huge amounts of revenue without being taxed like a normal enterprise.

“That leads to the Government missing a huge source of income for the State budget,” minister Dung said.