Removing policy bottlenecks to help businesses recover

According to the Vietnam Federation of Commerce and Industry (VCCI), the figure of 100,000 enterprises leaving the market in the first six months of the year (up 19.7% over the same period) just announced by the General Statistics Office shows that the production and business activities of enterprises during this period are facing many difficulties. Many units are in a precarious situation, on the brink of bankruptcy due to policy bottlenecks, the burden of specialized inspection procedures, the lack of consistency between laws, etc.

Workers at Vander Leun Company Limited (Nam Cau Kien Industrial Park, Hai Phong ) specializing in manufacturing and assembling electrical cabinets for ships. (Photo: TRAN HAI)

Although the problems have been reported many times, they have not been completely resolved. Therefore, it is urgent to quickly remove the bottlenecks and support businesses, in order to create a favorable investment and business environment, create more motivation for businesses in production and business, contributing to promoting economic growth.

full of difficulties

According to the General Statistics Office, in the first six months of the year, the country had 113,600 newly registered enterprises and returned to the market, down 2.9% over the same period. Of these, 75,900 were newly registered enterprises, down 0.5%, and 37,700 enterprises returned to operation, down 7.4% over the same period.

However, up to 60,200 enterprises temporarily suspended business, up 18.2%; 31,000 enterprises stopped operating pending dissolution procedures, up 28.9%; 8,800 enterprises completed dissolution procedures, up 2.8% over the same period. Thus, after only the first half of 2023, up to 100,000 enterprises left the market.

Statistics on the business situation show that most businesses are facing difficulties in cash flow, orders, and supply chain disruptions; along with difficulties in regulations on standards, criteria, business conditions, etc., as well as various types of documents and papers, which have been mentioned many times but have not been resolved. In fact, many regulations have pushed businesses into a situation where they will certainly violate them.

Chairman of Thanh Hoa Province Business Association, Cao Tien Doan, affirmed that businesses have never faced such difficulties as they do now. Such "waves of difficulties" have forced some businesses to close, many businesses have had to cut staff and reduce working hours.

Some businesses even choose to "sit still", not operating, leading to job losses and reduced state budget revenue. Some regulations are appropriate when issued, but the implementation process creates many administrative procedures, causing difficulties for businesses. The reason for this situation is that businesses are facing new regulations such as regulations on fire prevention and fighting.

In addition, the issue of administrative procedure reform has not achieved real results when some officials and civil servants show signs of avoiding and pushing work, fearing mistakes and responsibility, and not making decisions on work within their authority. This causes public service activities to stagnate, the progress of many works and projects to be prolonged, causing loss, waste, and loss of investment opportunities, pushing businesses into an increasingly difficult situation.

Sharing the same view, Chairman of the Vietnam Beer-Alcohol-Beverage Association Nguyen Van Viet said that beverage businesses are facing many difficulties due to the impact of the post-Covid-19 pandemic when consumption demand decreased, input material prices increased by 50-60%, and financial responsibility pressure from other policies.

The Ministry of Finance is currently seeking opinions on amending the Law on Special Consumption Tax with the direction of increasing the tax rate on sugary drinks, which could lead to unfair discrimination policies, causing significant impacts on the beverage industry and related supporting industries. Currently, there is no evidence to prove that increasing the special consumption tax on sugary drinks will help reduce the risk of non-communicable diseases, especially overweight and obesity.

If compared to the amount of calories provided to the human body, sugary soft drinks only provide about 44 kcal/100 g, while confectionery products are all more than 300-400 kcal/100 g. Therefore, relevant agencies need to consider and not apply a discriminatory policy to soft drink products based on prejudice, especially in the context of businesses just recovering from the pandemic. This could have a major impact on the recovery of businesses and the Government's growth target in 2023.

Strengthening business confidence

Resolutely promoting further administrative procedure reform and improving the investment and business environment is always the content emphasized by the Government and the Prime Minister in meetings and directives. In reality, it has been recorded that policy difficulties are even greater than market difficulties for businesses.

The difficulty for Vietnam is that the policy goals are very supportive and helpful to businesses, but the sharing or actions of relevant agencies are not in agreement with each other. Giving a specific example, VCCI Deputy General Secretary Dau Anh Tuan shared that there are businesses "bitterly" saying that at this time, they should be discussing solutions to help businesses reduce taxes, but instead they are discussing adding some industries and products to the tax increase list.

We are spending a lot of time and effort to reduce the value added tax (VAT) by 2%, but we are adding many industries to the list of products subject to special consumption tax. It is natural that businesses react to policies like this because there are inconsistencies and unreasonableness among the policies.

Therefore, Mr. Tuan raised the question, how can regulations from the construction, promulgation to implementation stages be effective in management while still creating favorable conditions for production and business? Because it seems that policy makers are focusing on policy goals, while how to reform or which areas to reform, what responsibilities of ministries and branches, and what roadmaps need to be reduced are rarely discussed. In fact, business conditions and accompanying administrative procedures are still major obstacles for businesses.

It can be said that amending and supplementing policies is necessary, reflecting the country's development, in accordance with the context. However, the timing of amendments and the content of the amendments need to be carefully considered, including listening to the opinions of businesses and industry associations. This helps to ensure the harmony of interests of the State, people and businesses and does not cause disruptions or negative impacts on the stability of institutions, policies, and the investment and business environment of Vietnam in the eyes of foreign investors.

According to a report recently released by the Economist Intelligence Unit, Vietnam has risen 12 places in the business environment rankings, while Thailand has risen only 10 places and India has risen six places. In the Business Confidence Index (BCI) report for the second quarter of 2023 recently released by the European Chamber of Commerce in Vietnam (EuroCham Vietnam), 48% of survey participants expect their company's foreign direct investment (FDI) in Vietnam to increase in the next quarter.

In particular, Vietnam has consolidated its position as one of the top five investment destinations for more than one-third of European enterprises. This shows that there is still a lot of room for institutional reform in our country. The business community is looking forward to the Government, ministries, branches and localities accompanying and removing difficulties for enterprises; creating the best conditions for enterprises to recover in the current period of unprecedented difficulties.

In order to restore the economy, create confidence for the business community, and at the same time provide substantial support to businesses on the brink of bankruptcy or dissolution, the Government needs to further promote administrative reform, have breakthrough solutions, and apply truly appropriate and effective policies to support businesses.

Authorities at all levels need to continue to carry out administrative reforms, strongly improve the business investment environment, eliminate inappropriate regulations, especially remove policy bottlenecks or overcome slow and poor implementation to avoid affecting business operations.

At the same time, we must resolutely prevent and repel the situation of harassment and inconvenience to businesses in handling work. For their part, businesses also need to make every effort, promote production and business activities, strive for a quick and sustainable recovery, thereby contributing to the stable development of the Vietnamese economy.

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