Official calls for tax incentives to assist firms

>> Firms pushed back against the wall

The roots of businesses’ hardship, Loc said, are the exorbitant input costs and interest rates, while the outlets for their products are obstructed.

Many manufacturers have good business plans, which can help them to develop and contribute more to the state budget, but only in case they are sufficiently supported, he said.

While many businesses are facing capital and liquidity shortages, they cannot access bank loans since they have failed to prove the effectiveness of their business plan amid the ongoing economic turbulence.

Hence, they need stronger and more active support from the government, said Loc.

“The government, and its administrative bodies, can follow the example of the central city of Danang, whose authorities held meetings with local enterprises to evaluate the importance and effectiveness of their projects,” elaborated Loc.

“Authorities would later recommend businesses whose projects are necessary for the city’s economic development to credit institutions to provide financial aid for them to continue the projects.”

The chairman added that besides cutting lending interest rates, the government should also prioritize tax deferral and exemption for businesses this year.

He cited figures from the Ministry of Finance as saying that the state budget collection in 2011surpassed the target, so it is feasible for tax incentives to be released.

“Once the enterprises are able to overcome difficulties thanks to the tax relief, they can boost production and contribute more to the budget later,” he stated.

Loc said local authorities should also defer the land use fee, or other fees to be paid in implementing projects.

“Meanwhile, the government should also try not to set any new fees, in order to avoid burdening input expenses on the businesses,” he added.

The government also has to create conditions for small- and medium-sized enterprises to access ODA loans for their production.

“Moreover, paperwork and administrative procedures should be simplified to reduce expenses,” he concluded, adding that the National Assembly should take action to assist local enterprises.