Understand enterprises to support them

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Nguyen Van Than

What do you think about the support policy for the business community?

After the Covid-19 pandemic spread from the beginning of 2020, the Government quickly launched packages to support the economy and social security, such as a credit package of VND250,000 billion with lower interest rates than the market for businesses affected by the pandemic, and support packages for people, employees and employers.

In 2021, the Government and the National Assembly will continue to issue resolutions and support policies on exemption and reduction of taxes, fees and land rents; interest rate reduction and debt restructuring.

The above support packages have been issued, showing that the Government has foreseen the scenario that businesses will face difficulties, especially small and medium enterprises. Moreover, if in the initial period of promulgation and implementation, the policies still have strict conditions, making many businesses and employees unable to meet them, then after a period of listening to opinions of people and businesses, the Government, ministries and branches issued many documents and circulars, especially Decree 52/2021/ND-CP dated April 19, 2021 on extending the deadline for payment of value-added tax, corporate income tax, personal income tax and land rent in 2021, with a more open mechanism, helping provide resources to businesses in particular and the economy in general to recover production.

Of course, our country's budget cannot be compared with that of major economies in the world, the pandemic is also an unprecedented crisis, so the level of issuance will still be limited and not satisfy all businesses across the country. However, as I said, the policies issued above have been a great effort of the Government, in the spirit of accompanying and sharing with businesses, so businesses must also understand and cooperate with state agencies.

In fact, many businesses, especially small and medium enterprises still have difficulty accessing supportive policies, why is this?

During the Covid-19 pandemic, small and medium-sized enterprises were the most severely affected, as the number of these businesses account for over 98% of the total number of enterprises in the country. Therefore, small and medium-sized enterprises need the most support from management agencies to recover from the difficulties of the pandemic.

However, access to policies is still difficult. The reason is that the conditions for receiving support are still beyond the "reach" of many small and medium enterprises. Some state agencies have not fully defined the capacity of Vietnamese enterprises, so they have set forth difficult conditions to enforce when formulating support policies.

For example, the tax exemption and reduction policy is for corporate income tax in 2020, but the revenue of many small and medium-sized enterprises in 2020 is very low. The policy is practical, but the level of enjoyment for businesses is not high. In addition, policies to support employees and employers related to social insurance have little impact, because small and medium enterprises have so far been limited in paying social insurance.

However, subjective reasons from businesses still account for the majority.

Because small and medium-sized enterprises often do not have methodical accounting books, it is difficult to prove income and losses. Therefore, it is not only difficult to enjoy the support policy but also makes it difficult for themselves when applying for a loan. As far as I can see, for small businesses, 9 out of 10 enterprises are still in loan conditions, so they can't get a loan.

How will businesses operate in 2022?

Vietnam has been living in the "new normal", the number of Covid-19 cases is still high, but vaccine coverage has expanded, which will quickly create herd immunity. Therefore, businesses will surely return to activities, business and production in a more active way.

It's not that I'm optimistic about the economic situation during the pandemic, but this comes from the peculiarities of small and medium enterprises. These businesses have very flexible operations, can change very quickly, and operate in multiple industries and fields, so if this industry is closed, they will quickly switch to another field.

Therefore, Vietnam has a large number of small and medium-sized enterprises, plus about 5 million individual business households, which will create rapid recovery momentum when these businesses and business households stand firm. Thereby creating stability for the economy and social security, while if a large enterprise "breaks down", the economy will immediately wobble.

What measures should be taken to improve the promulgation and implementation of support policies? Should specific policies be issued to support and revive businesses that return to operation?

Regarding specific policies, I think it is not necessary. Decrees, resolutions and documents of ministries and branches from the National Assembly to the Government are more than enough. The next issue that we need pay more attention to is the implementation stage. The central agency issued the right decision, but the enforcement agency and the locality added more procedures, overlapping laws make the support policy not find the right "address".

In addition, the conditions to enjoy the support policy should be reduced, the interest rate must also be cut, possibly through the policy of subsidizing interest rate compensation that the Government is preparing to submit to the National Assembly. Public investment policy should spend about 30% for small and medium enterprises to participate like large enterprises, to stimulate and increase resources.

In particular, an important and long-standing business support policy is the reform of administrative procedures and the improvement of the business environment, etc. Management agencies should continue to reduce business procedures and conditions, specialized inspection procedures, online implementation of procedures related to taxes, fees, import and export, will create a clear corridor for businesses to operate. Technology must also catch up with the world's achievements to help businesses digitize and improve productivity.

Thank you, sir!