The General Statistics Office's report on the socio -economic situation in the first five months of 2023 shows that the situation of Vietnam's business sector has not improved.
It is worth noting that the causes of difficulties for the production and business community come not only from the difficult cycle of the world economy but also from internal problems of the economy.
Bankruptcy of enterprises is still increasing
According to the General Statistics Office, in the first five months of 2023, 88,000 enterprises nationwide temporarily suspended operations and completed bankruptcy procedures, an increase of 22.6% over the same period. On average, 19,000 enterprises were newly established and returned to operation per month, but 17,600 enterprises withdrew from the market. Notably, the average registered capital of a newly established enterprise also decreased by 24.1% over the same period, to an average of only VND 9.2 billion, lower than during the Covid-19 pandemic.
The Report on the Results of the Survey on the Business Situation recently released by the Private Economic Development Research Board (Board IV, under the Prime Minister 's Administrative Procedure Reform Advisory Council) also shows that 82.3% of surveyed businesses expect to have to reduce their scale, temporarily suspend business or stop business from now until the end of the year due to too many difficulties. For businesses that remain in the market, 71.2% of businesses expect to reduce their workforce by more than 5%; 80.7% of businesses expect to reduce their revenue by more than 5%, of which 29.4% of businesses have a revenue reduction rate of more than 50%.
In the first five months of 2023, 88,000 enterprises nationwide temporarily suspended operations and completed bankruptcy procedures, an increase of 22.6% over the same period. On average, 19,000 enterprises were newly established and returned to operation per month, but 17,600 enterprises withdrew from the market.
From the above figures, Dr. Phan Duc Hieu, Standing Member of the National Assembly's Economic Committee, commented that the "health" of the business community has been eroded significantly compared to last year. Unfortunately, in the context that the National Assembly and the Government have had and are having many policies to support economic recovery and growth, businesses still face many obstacles due to difficulties in administrative procedures and the risk of criminalizing economic relations.
This situation shows that there are still new barriers that are not small being created, even in some cases, one procedure is replaced by another. At this time, state management agencies should not issue new regulations that create additional costs for production and business activities.
In the business support policy, improving the business environment is still a requirement that must be prioritized and implemented more strongly with more effective and faster business support solutions. The Government has done well in these requirements during the Covid-19 pandemic, so it needs to continue to promote.
Dr. Phan Duc Hieu
In case of mandatory issuance, there should be a support mechanism to comply with new regulations as experienced by many countries. "In the policy to support businesses, improving the business environment is still a requirement that must be prioritized and implemented more strongly with more effective and faster methods of supporting businesses. The Government has done well with these requirements during the Covid-19 pandemic, so it needs to continue to promote," emphasized Dr. Phan Duc Hieu.
Create more resources for business
In the survey results of Committee IV, businesses pointed out four major difficulties and challenges they are facing. These are difficulties due to lack of orders; difficulty in accessing loans; carrying out administrative procedures and meeting legal regulations; and the risk of criminalizing economic transactions.
It is worrying that business confidence in the macro economy and industry economy in this context is declining, especially for construction enterprises, micro-enterprises, small and medium-sized enterprises, non-state enterprises, and enterprises in Ho Chi Minh City.
The business community feels that local government support has not met practical requirements; 84% of businesses participating in the survey rated the effectiveness of local government management and support as ineffective.
According to Dr. Phan Duc Hieu, at this difficult time, we need to seize every opportunity for businesses to survive and stand firm. If businesses give up and go bankrupt because of too many difficulties, the operating costs will be very high later.
If there is an opportunity, even if it is very small, we must seize it so that businesses can survive and maintain operations through this difficult period. In the immediate future, businesses' tax refund requests must be resolved promptly and decisively. This issue has been raised for a long time, through many meetings, but there is still no solution. Businesses cannot be left short of money and have to borrow while tax refunds have been pending for many years. This is also the content mentioned in the Report of Committee IV.
According to Executive Director of Division IV Pham Thi Ngoc Thuy, there are tax refund procedures that businesses have requested for three years and have not been resolved. What needs to be done now is to speed up tax refunds under a special mechanism. Since the end of last year, businesses in the wood and rubber industries have continuously called for help because thousands of billions of VND in value-added tax (VAT) refunds have been "held" for a long time while businesses are financially exhausted due to difficulties caused by the Covid-19 pandemic and fluctuations in the output market.
Panel IV proposed a mechanism that allows businesses to receive tax refunds within three months of completing an export order, combined with inspection and post-audit measures to control risks and prevent tax fraud. This mechanism will create conditions for the majority of businesses to comply with the law while still being able to fight tax fraud.
One solution recommended by the business community, experts and research organizations is to boost public investment to pump money into the economy, focusing on improving the quality of the country's important infrastructure. In particular, focusing on infrastructure connecting existing economic centers with neighboring localities to create opportunities to attract new waves of private investment and foreign investment.
Urgent solutions at this time also include the need to reduce costs, improve business competitiveness and increase access to loans.
Accordingly, it is necessary to extend the duration of business support policies that have been effective during the Covid-19 pandemic, such as reducing VAT by 2%; research preferential credit packages for key production sectors and industries, small and medium enterprises, etc.
PHUONG ANH
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