Support sector firms need access points

The Ministry of Planning and Investment recently released a survey of 650 Vietnamese and foreign supporting industry enterprises in Ho Chi Minh City, Dong Nai and Binh Duong provinces, which revealed that incentives such as credit support, reductions in tax, land rental and training and educational support were out of reach.

In general, up to 55 per cent of total surveyed enterprises said they could not benefit from such incentives. The rates are 47.6 and 67.2 per cent for foreign and local private enterprises, respectively.

For credit support, the respective rates were 72.4 and 85.7 per cent for local and foreign enterprises. As for support in workforce training, the general rate is up to 94.9 per cent.

Doan Hai Yen, chairwoman of the survey-making project, ascribed enterprises’ such woes to many reasons.

“Survey results show that enterprises’ biggest hurdle is policies have been changing too quickly and many policies are inconsistent,” she said.

Up to 45.2 per cent of surveyed enterprises underscored three obstructions including the lack of information and consultancy services and policy-related big changes.

With four different levels of importance numbered from one to four, with one being “very important”, two being “important”, three being “less important” and four being “unimportant”, the surveyed enterprises said the most important thing for them now was the transparent implementation of land tax and rental incentives (1.41), then the further simplification of administrative reforms (1.63) and the support in capital access plus preferential lending rates (1.78). Meanwhile, the government’s support in technology and workforce training is considered to be less important, with 2.2 and 2.29 respectively.

This message was backed up by at the recent mid-term Vietnam Business Forum in Hanoi, where EuroCham chairman Preben Hjortlund said most European enterprises in Vietnam were “unfairly harassed by authorities for tax payments,” and faced with far more audits than in the past and authorities were reinterpreting rules in their favour.

“When asked what aspects of the official scrutiny are of biggest concern to our members, the most cited concern is the new interpretations of tax laws and auditing visits, with fully 85 per cent of respondents citing these tax related areas,” he said.

“EuroCham will continue to advocate the need for removing any unwarranted scrutiny and for applying all the rules fairly across all companies operating in Vietnam,” he said.

Yen said: “The improvement of policy-making and quality is greatly needed to help enterprises out of difficulties. All policy-related impediments have led to enterprises’ low confidence to their performance outlook.”

According to the survey, a humble rate of 41.4 per cent of surveyed enterprises said they “will continue their investment.” More than half of the respondents stated they “will not invest any more” or “have yet to decide on further investment” because they “fail to see a clear business prospect” in the coming time in Vietnam.