Strengthen decentralization to facilitate enterprises

VCN - At the Workshop to collect opinions on the draft Law on Management and Investment of State Capital in Enterprises held on August 5, 2024 in Ho Chi Minh City, delegates said that it is necessary to increase decentralization of power, create favorable conditions for enterprises to produce and do business, and properly demonstrate the key and leading role of state-owned enterprises...
Workshop to collect opinions on the draft Law on Management and Investment of State Capital in Enterprises held on August 5, 2024 in Ho Chi Minh City Photo:T.D
Workshop to collect opinions on the draft Law on Management and Investment of State Capital in Enterprises held on August 5, 2024 in Ho Chi Minh City Photo:T.D

Mr. Bui Tuan Minh, Director of the Corporate Finance Department (Ministry of Finance), has revealed that the draft law on management and investment of state capital in enterprises (hereinafter referred to as the Draft Law) introduces several new provisions compared to Law 69/2014/QH13 to better suit practical demands.

Notably, the Draft Law clearly stipulates the procedures, responsibilities of agencies, required documents, and content for the scrutiny of reports seeking National Assembly approval for investment in enterprises. Additionally, the draft updates the list of sectors where the state needs to invest capital in enterprises; it also codifies provisions on the accountability of the owner's representative agencies, state-owned enterprises, and representatives of the owner regarding state management of enterprises and related issues before the National Assembly, Government, and relevant agencies.

The management of state capital invested in enterprises aims to separate and clearly define the functions of the capital owner and state management, to clearly delineate and strongly decentralize management, inspection, supervision, reporting, and explanation of state capital investment in the direction of: the state and government managing the owner's representative agency, the owner's representative agency managing the capital share in directly state-owned enterprises, and directly state-owned enterprises being responsible for managing the capital share in other state-owned enterprises, Mr. Bui Tuan Minh emphasized.

Contributing his opinions at the workshop, Mr. Vo Huu Hanh, Manager of the Ho Chi Minh City Corporate Finance Sub-department, assessed that this draft law represents a fundamental and comprehensive renovation compared to the previous one. This time, elements such as management of debts, capital mobilization, and fixed asset procurement are absent, indicating the drafting committee's intention to decentralize more authority to enterprises in capital management and utilization.

Regarding the rights of the owner's representative agency, Mr. Hanh stated that according to Clause 8, Article 21 of the Law on Organization of Local Government 2015, provincial People's Committees have the right to decentralize and authorize lower-level People's Committees, agencies, and other organizations to perform the tasks and powers of the provincial People's Committees.

Colonel Nguyen Nang Toan, Deputy General Director of Tan Cang Sai Gon Corporation
Colonel Nguyen Nang Toan, Deputy General Director of Tan Cang Sai Gon Corporation

Therefore, to contribute to enhancing proactivity, timeliness, and effectiveness in performing the function of representing the owner of 100%-state-owned enterprises, Mr. Hanh suggested studying and supplementing the provision on "decentralization" for certain tasks within the competence of the "owner's representative agency, which is the provincial People's Committee" to specialized agencies and directly subordinate People's Committees (based on regulations on the organization of local government).

To ensure the goals and requirements of clear delineation and strong decentralization in the Draft Law, many opinions at the workshop also suggested that regulations should be oriented towards the state managing investment capital through the owner's representative agency (not directly managing enterprises with state capital), the owner's representative agency being responsible for managing capital in directly state-owned enterprises (not directly managing enterprises with other state capital), and directly state-owned enterprises being responsible for managing capital in other state-owned enterprises.

Regarding the issue of salaries, the draft stipulates that the salaries and bonuses of the Chairman and members of the Board of Members are derived from after-tax profits. Some opinions suggest that this should be reviewed to align with the provisions of the Law on Accounting Law and Law on Enterprises.

Colonel Nguyen Nang Toan, Deputy General Director of Tan Cang Sai Gon Corporation, cited that according to the Law on Tax and the Law on Enterprises, this is an expense of the enterprise. For state-owned enterprises that operate at a loss and are inefficient, there will be no source to pay salaries to managers. Currently, in state-owned enterprises, it is not only the capital representative or the chairman who represents the owner but even executives such as the general director are also appointed by the owner.

If separated in such a way, with the same position appointed by the owner but one person's salary is derived from costs while another's is from profits, and if the enterprise has no profits, then the person receiving a portion of the profits will face difficulties and conflicts may arise in enterprise management.

By Thu Dịu/Thanh Thuy

Related News

Ensuring efficiency and transparency in use and management of houses and land at State enterprises

Ensuring efficiency and transparency in use and management of houses and land at State enterprises

VCN - According to the Ministry of Finance, the issuance of Directive on strengthening management, improving the efficiency of use and handling of houses and land at State-owned enterprises to ensure the effective management, use and handling of houses and land for the right purposes, and to avoid loss and waste.
Major reforms in the management of state capital in enterprises

Major reforms in the management of state capital in enterprises

VCN - The draft Law on Management and Investment of State Capital in Enterprises is set to be presented and discussed at the National Assembly, featuring numerous new provisions after multiple rounds of public consultation. The draft law is expected to bring significant reforms to the operational framework for managing state capital and state-owned enterprises (SOEs).
Strengthening the financial “health” of state-owned enterprises

Strengthening the financial “health” of state-owned enterprises

VCN - The state economy plays a key role in the socio-economic development process, but it is necessary to strengthen the financial health and competitiveness of state-owned enterprises (SOEs).
Delegating the power to the government to waive, lower, or manage late tax penalties is suitable

Delegating the power to the government to waive, lower, or manage late tax penalties is suitable

VCN - Discussing in groups about the project "1 law amending 7 laws" in the financial sector according to the program of the 8th Session on October 29, 2024, National Assembly delegates proposed that the Government should be assigned to make specific regulations on decentralization, granting the right to exempt and reduce taxes, and handling penalties for late payment of taxes...

Latest News

SBV makes significant net withdrawal to stabilise exchange rate

SBV makes significant net withdrawal to stabilise exchange rate

Analysis shows it’s an intervention to manage system liquidity.
Việt Nam could maintain inflation between 3.5–4.5% in 2025: experts

Việt Nam could maintain inflation between 3.5–4.5% in 2025: experts

The forecasts were presented by experts at the scientific conference titled ’Market and Price Developments in Việt Nam in 2024 and Forecasts for 2025’ organised by the Institute of Economics and Finance and the Price Management Department on January 9 in Hà Nội.
Banking industry to focus on bad debt handling targets in 2025

Banking industry to focus on bad debt handling targets in 2025

The non-performing loan (NPL) ratio of the banking system (excluding NPLs of weak commercial banks) needs to be controlled at below 3 per cent by the end of 2025.
State Bank sets higher credit growth target for 2025

State Bank sets higher credit growth target for 2025

The credit growth target for the banking system in 2025 has been set higher than in 2024.

More News

Outlook for lending rates in 2025?

Outlook for lending rates in 2025?

VCN - The economy is forecast to continue to recover strongly from the end of 2024 to 2025, helping credit demand increase rapidly, but lending interest rates may also be under increasing pressure.
Tax policies drive strong economic recovery and growth

Tax policies drive strong economic recovery and growth

VCN - Far more than just a revenue-collection agency, the Tax Department has played a pivotal role in creating a transparent, equitable, and business-friendly environment. These efforts have not only contributed to macroeconomic stability but also fueled recovery and development for businesses, individuals, and households.
E-commerce tax collection estimated at VND 116 Trillion

E-commerce tax collection estimated at VND 116 Trillion

VCN - According to data from the General Department of Taxation, taxes declared and paid directly by foreign suppliers via the electronic portal in 2024 amounted to VND 8.687 trillion, equivalent to 126% of the previous year’s total and a 74% increase compared to current appropriation.
Big 4 banks estimate positive business results in 2024

Big 4 banks estimate positive business results in 2024

One of the country’s biggest banks expects results to be the best for four years.
Flexible and proactive when exchange rates still fluctuate in 2025

Flexible and proactive when exchange rates still fluctuate in 2025

VCN - In the last days of 2024, as many forecasts, the US Federal Reserve (Fed) continued to cut interest rates, pushing the USD index up, creating pressure on domestic exchange rates. Therefore, domestic exchange rate management policies need to continue to be flexible and appropriate, thereby supporting businesses in import and export.
Issuing government bonds has met the budget capital at reasonable costs

Issuing government bonds has met the budget capital at reasonable costs

VCN - According to the State Treasury's report, capital mobilization through the issuance of government bonds has ensured mobilization to meet the capital needs of the state budget at reasonable costs.
Bank stocks drive market gains as VN-Index closes final Friday of 2024 on a positive note

Bank stocks drive market gains as VN-Index closes final Friday of 2024 on a positive note

Việt Nam’s stock market ended the final Friday of 2024 on a positive note, with banking stocks leading the rally and VN-Index successfully surpassing the 1,275-point mark.
Banks still "struggling" to find tools for handling bad debt

Banks still "struggling" to find tools for handling bad debt

VCN - According to financial experts, the rising trend in bad debt continues to pose significant challenges to debt resolution and recovery efforts at credit institutions (CIs).
Forecast upbeat for banking industry in 2025

Forecast upbeat for banking industry in 2025

In a recent report, ACB Securities Companies analysts said that the net interest margin (NIM) of banks in 2025 will increase by five basis points over 2024.
Read More

Your care

Latest Most read
SBV makes significant net withdrawal to stabilise exchange rate

SBV makes significant net withdrawal to stabilise exchange rate

Analysis shows it’s an intervention to manage system liquidity.
Việt Nam could maintain inflation between 3.5–4.5% in 2025: experts

Việt Nam could maintain inflation between 3.5–4.5% in 2025: experts

The forecasts were presented by experts at the scientific conference titled ’Market and Price Developments in Việt Nam in 2024 and Forecasts for 2025’ organised by the Institute of Economics and Finance and the Price Management Department on January 9 in Hà Nội.
Banking industry to focus on bad debt handling targets in 2025

Banking industry to focus on bad debt handling targets in 2025

The non-performing loan (NPL) ratio of the banking system (excluding NPLs of weak commercial banks) needs to be controlled at below 3 per cent by the end of 2025.
State Bank sets higher credit growth target for 2025

State Bank sets higher credit growth target for 2025

The credit growth target for the banking system in 2025 has been set higher than in 2024.
Outlook for lending rates in 2025?

Outlook for lending rates in 2025?

VCN - According to the SBV, in managing interest rates in 2024, the SBV will continue to maintain the operating interest rates amid the global world interest rates remaining at high levels.
Mobile Version