Barriers in administrative procedures have deterred the development of mechanical firms (Photo: VNA)

Hanoi (VNA) — Businesses in the mechanical sector in Hanoi are facing shortage of capital, production area and high quality human resources, as well as shortcomings in import taxes levied on materials.

Nguyen Xuan Phu, chairman of the management board of Sunhouse Group, said that barriers in administrative procedures have deterred the development of mechanical firms.

Phu said his group bought land in the city’s Hoai Duc district in 2007 to build a factory, but they have still to complete the administrative procedures. They have found it difficult to access bank loans with low interest rates. In addition, the lack of technology and equipment together with small production scales has made it difficult for mechanical companies to meet the strict requirements.

“Mechanical firms need support from the Government in administrative reforms and trade promotions while creating conditions for them to build their brands,” he said.

He said the Government should support companies which have already built their brands nationally, and added that with the current level of support it will not be possible for Vietnam to have prestigious trademarks.

Participants at a meeting between the Hanoi Small and Medium-sized enterprises Association and the Department of Industry and Trade held in the capital earlier this week also said that one of the barriers facing the sector is the shortcomings in the tax policies.

For example, the imported tax on mechanical products is zero percent while for imported spare parts it is five percent. These tax policies have discouraged domestic businesses which have preferred importing products to producing their own.

Moreover, the anti-dumping tax levied on stainless steel, which is used in home appliances, has not benefited small firms.

Sharing these ideas, the department’s director Le Hong Thang asked the association to collect proposals from mechanical companies and find timely solutions to the difficulties they face.

Shortcomings in mechanisms and policies should not prevent the development of the business community as well as the economy, Thang said.

He added that mechanical products will find it hard to compete in the deep global integration, and the department will set up a team to solve the difficulties.-VNA