PM issues directive to provide support for SMEs
Hanoi (VNS/VNA) – Prime Minister Nguyen Xuan Phuc has issued a
directive on implementation of the Law on Support for Small- and Medium-sized
Enterprises (SMEs).
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.-VNS/VNA