|Workers at Trung Dung Co Ltd, a manufacturer of elastic threads and yarn in Tan Trieu Commune in Hanoi’s suburban district Thanh Tri. The company employs around 200 employees. (Photo: VNA) |
Tax deductions, land allocation programmes and the establishment of appropriate credit lines along with a comprehensive legal framework are among the tasks ordered by the PM.
His directive, issued last week, was meant to bring to live the highly anticipated SMEs law, which took effect at the beginning of the year.
SMEs, or enterprises with capital of less than 100 billion VND (4.36 million USD), account for 95 percent of Vietnam’s business community.
PM Phuc assigned the Ministry of Planning and Investment (MPI), in collaboration with other concerned ministries and people’s committees, to speed up the issuance of the decree on the organisation and activities of the fund to promote SMEs.
He also asked them to issue a range of circulars on human resource development and establish a network of counsellors to help SMEs, as required in the SMEs law.
The Ministry of Finance (MoF) was asked to revise the corporate income tax code, including establishing a specific income tax rate for SMEs as well as regulations for tax waivers or deductions for SMEs within start-up incubators, technical centres and common working spaces. Organisations that established a “production distribution chain” in which 80 per cent of SMEs within the chain completed manufacturing in Vietnam will enjoy an exemption or reduction of their income tax.
The PM also asked for adjustments to tax reduction regulations for start-ups and SMEs which have transitioned from business households, in order to boost the businesses’ viability.
Aside from tax cuts, the PM also asked the finance ministry to issue guidelines on land use fee exemptions or reductions for SMEs, provide financial support for the network of counsellors to aid SMEs and elaborate on a basic accounting model for micro-sized enterprises to implement.
According to the directive, the Ministry of Science and Technology shall assume the prime responsibility for issuing guiding policies to help SMEs study and adopt modernising technologies, as well as aid SMEs’ acquisition and mastery of new technologies through consulting, research and training activities.
The Ministry of Natural Resources and Environment, in coordination with people’s committees of the provinces and centrally run cities, is tasked with guiding localities to allocate land funds for the formation and development of industrial clusters, agro-forestry, fishery and seafood processing plants for SMEs within the year.
The Government leader also asked the Ministry of Justice to amend the Government’s Decree on legal support for enterprises, with December 12 being the deadline.
The planning ministry is charged with serving as the focal point to coordinate with other ministries and localities to identify the goals, recipients and priority support areas to build and implement policies and programmes to support SMEs as per the law.
To support SMEs across the country, a national information portal will also be opened, developed by the planning ministry, which will feature a diverse range of information, from expert guidance and policy news to science and technology documents.
The funds for the SMEs supporting programmes will be handled by the finance ministry and localities.
The State Bank of Vietnam will hold the prime responsibility for setting up credit packages with preferential interest rates for SMEs as well as developing an interest rate subsidy policy regarding loans for SMEs, start-ups or enterprises participating in value chains.
Business community organisations such as the Vietnam Chamber of Commerce and Industry (VCCI) and Vietnam Association of Small and Medium Enterprises (VNASME) are asked to work together with relevant ministries and local authorities to intensify information dissemination on the Government’s legal support for their member enterprises.
According to the General Statistics Office of Vietnam, in the last five months, 52,300 new enterprises have been established with total registered capital reaching 516.9 trillion VND – up 3.5 and 6.4 percent compared to the respective figures from 2017.
However, in the same period, 33,400 enterprises were shut down (up 3.9 percent compared to last year) with the total number of enterprises having completed filings for bankruptcy reaching 5,500, up 18.1 percent compared to the same period last year.
Meanwhile, the Government aims to have at least one million “healthy” enterprises by the end of 2020, which means that each year, at least a total of 150,000 new enterprises must be set up.