“Entrepreneurs’ Year 2014” has been regarded as a new sign of getting out of economic recession and keeping up with market development. Will the picture be brighter in 2015? Vietnam Business Forum interviewed Dr Vu Tien Loc, President of Vietnam Chamber of Commerce and Industry (VCCI), on the issue. Lan Anh reports.
In 2014, the government and related authorities have assisted the business community in removing hurdles and promoting business activities. How was the result?
Since the beginning of 2014, with Resolution 01/NQ-CP, the government has focused on solutions to assist the business community. Among 9 solution packages, the top priority was to promote business activities. Others were on macro-economic stabilisation, inflation control, economic restructuring, new growth model, quality efficiency and competitiveness.
In particular, the implementation of Resolution 19/NQ-CPhas improved formalities in taxation, customs, power supply and businessenvironment at provincial level.
For its part, the Ministry of Finance has reviewed 645 administrative formalities and shortened 54 percent the time for paying taxes. Some 95 percent of businesses have applied e-tax declaration and 18 localities have applied e-tax collection. One-stop shops have been operated at Vietnamese international sea-ports.
Fully aware of business problems, the government had submitted to the National Assembly amendments on Business Income Tax Law and Added-value Tax, which were approved a year ago. In particular, the business community highly appreciated the timely annulment of ceiling policy on advertisement fees.
The implementation of policy has always been a big problem for businesses, how to help them out?
Direction 11/CT-TTg of May 21, 2014 of the Prime Minister based on over 300 recommendations of over 400 businesses in their meeting with the Prime Minister, Deputy Prime Ministers and 12 representatives of related ministries has in fact promoted business activities to attain socio-economic objectives in 2015.
A mechanism has been formed and working effectively to help businesses in policy implementation. Last year, VCCI registered over 400 recommendations from businesses and forwarded them to related authorities. In their turn, 12 authorities and localities have removed business constraints, reported to the government or recommended the National Assembly for amendments. In financial sector, in conjunction with the Ministry of Finance, VCCI has sponsored two conferences on taxes and customs with the participation of over 600 businesses.
Efforts of businesses and assistance of the government have brought good result. In 2014, 74,842 businesses were registered with total capital of VND432,286 billion (2.7 percent less in number but 8.4 percent more in registered capital). Difficulties have proven truly qualified businesses which not only survived but also expanded business activities. In 2014, 22.758 businesses increased their registered capital with a total of VND595,707 billion. Consequently, new registered capital in 2014 was VND1,027,993 billion.
Vietnam is developing a sustainable and sovereign economy and it depends largely on business community, what should the latter do to attain that goal?
The growth of Vietnamese economy relies on the linkage with global value chain and maximizing of FDI and in particular the development of private businesses, both medium and large-sized.
Opportunities have been opened up to businesses with more stable macro-economy, improved economic institution, especially Investment Law and Enterprise Law amended and many FTAs concluded. Whether the opportunities can be used for successful integration, it depends mainly on businesses themselves.
Small and medium-sized businesses (SMEs) must be reactivated and developed in supporting industries, science-technology, hi-tech products, export-processing, regional and global value chains, trade and service network, domestic retail sales and sector linkage. Meanwhile domestic percentage must be ensured in foreign-owned enterprises.
SMEs with small capital and low interest rate, “unattractive” to banking loans, should access credit through linkage enterprises – research-production-procession-consumption (sector linkage), or packaged collateral model without registered property or government “consumption stimulus”.
However, the problem cannot be confined only to the relations between banks and businesses. It is also the problem related to market, land, preferential capital, technology, management, transparency, and healthy business environment for all enterprises, SMEs included.
For State management, how should businesses be assisted to increase competitiveness and integrate deeper into the world economy?
Integrating deeper in the ever changing world economy, weak and less competitive Vietnamese businesses expect the government to continue major solution to improve business environment and increase national competitiveness so that the business community can play its important role in socio-economic development.
The government should also focus on solutions such as the law assisting SMEs to develop not only in number and size, but more importantly in sustainable development and competitiveness.
In addition, the government could issue decrees supporting certain industries on human resources, science-technology and finance in industrial and agricultural value chains, assisting supporting industries, industrial-agricultural projects, encouraging investment in infrastructure development in favour of SMEs, developing capacity-building and human resources, and financial support for private sector.
It is also important to develop certain industries with comparative advantages and business efficiency to build national trade marks.
The government could serve as “mid-wife” assisting businesses in restructuring, developing suitable business strategy, accessing resources and markets, applying new technology, increasing productivity and sustainable development. With such assistance, I believe that socio-economic development plan will be successfully attained in 2015 and in the years to come.
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