Reduce cost burden, businesses are “easier to breathe”

The fight against the Covid-19 epidemic in the past two years has exhausted many businesses and fields. Meanwhile, the cost of doing business has increased, leaving many companies in a difficult situation. Therefore, removing difficulties and cutting costs is always a problem that companies want.

Commenting on the “health” of enterprises at the recent forum “Support to reduce costs for businesses to restore production and business,” Mr. Nguyen Quang Vinh, General Secretary of the Vietnam Chamber of Commerce and Industry (Vietnam Chamber of Commerce and Industry) VCCI), said that the business community is experiencing a sharp decline in the scale of operations.

BUSINESSES NEED “breathing support”

In the first nine months of 2021, over 90,000 businesses have been dissolved and temporarily suspended their business. On average, more than 10,000 businesses withdraw from the market every month, increasing more than 24% compared to 2020. “Restoring production will be a complex problem. The risk of many businesses closing down, jobs not being restored, social security being seriously affected, “said Mr. Vinh.

To recover the economy, many practical support policies from the exemption, reduction, relaxation of taxes, land rent; reduce administrative procedures; interest rate support, continuously issued by the National Assembly, Government, ministries, and branches to help businesses and people overcome difficulties.

However, for the business community to continue to recover, Mr. Vinh said that support policies also need to be synchronized and unified to create synergy.

Support must be strong, ongoing, timely, and accessible. It must simplify processes and procedures to receive approval as much as possible. At the same time, there is a mechanism to closely monitor and inspect the implementation and handle sanctions to avoid taking advantage of the policy.

As an area that suffered enormous losses from the pandemic, Mr. Bui Doan Ne, General Secretary of the Vietnam Aviation Association, shared that the priority direction of aviation businesses is to continue to save costs after the pandemic. Therefore, policies to support companies should be considered, extending to the end of 2022, even to 2023.

At the same time, credit support for businesses can improve cash flow and have working capital. Support necessary investment programs for enterprises, mainly facilitating short-term loans with preferential interest rates for domestic airlines to reduce capital costs.

Similarly, Mr. Dao Trong Khoa, Standing Vice Chairman of Vietnam Logistics Business Association (VLA), General Director of T&M Forwarding, proposed to reduce corporate income tax and reduce value-added tax for logistics businesses.

“Recently, the National Assembly Standing Committee issued Resolution No. 406 on several solutions to support businesses and people affected by the Covid-19 epidemic. In which, It will reduce 30% of the payable corporate income tax amount of 2021 if the revenue in 2021 is not more than 200 billion VND and the revenue in 2021 is reduced compared to the revenue in 2019”.

However, with the increase in sea freight rates, some routes have increased ten times as in the past, leading to a rise in the revenue of logistics enterprises, especially international transport enterprises. Up to now, the company’s revenue has exceeded 200 billion.

But this does not mean that the profit of the business increases. On the contrary, the pressure on the cash flow of the business is much greater. Therefore, Mr. Khoa recommends applying a 30% corporate income tax reduction to be flexible with industries and fields. It is possible to loosen the revenue regulation to a level that is suitable for logistics businesses.

CUTTING COMPLIANCE COSTS

Resolution 406 stipulates a “30% reduction of value-added tax from November 1 to the end of December 31, 2021, for transportation goods and services”, but there is an “absence” of service enterprises transportation support. Transport enterprises face difficulties. The support service enterprises accompanying transportation also face problems.

Therefore, Mr. Khoa proposed to expand the support object to include transport support service enterprises, not simply transport enterprises as specified in Decree 406.

From a legal perspective, Mr. Dau Anh Tuan, Head of the Legal Department (VCCI), said that it is necessary to reduce administrative compliance costs for businesses. The policies to support enterprises do not seem to be much.

Up to now, there have been policies to support businesses affected by Covid-19, such as Resolution 68/CP dated May 12, 2020, of the Government, promulgating the Program to reduce and simplify regulations related to business activities in the period 2020–2025; Resolution No. 76 dated July 15, 2021, of the Government, promulgating the State Administration Reform Master Program for the 2021-2030 period.

However, there has not been a solid and methodical policy in implementing administrative procedure reform over the past year. Therefore, it is necessary to promote this activity in the future. According to Mr. Tuan, to support enterprises to restore production and business, it is required to implement two programs firmly.

Firstly, it is a group of procedures to put investment projects into operation (a high percentage of businesses have difficulties implementing investment policies, construction, environment, fire prevention, etc.)

Second is the group of import and export procedures (customs and specialized inspection). The export scale is vast, so if this procedure is shortened, the effect will be significant.

Mr. Tuan also suggested that ministries and branches reduce the number of product groups and product lines that need to be inspected and the number of shipments inspected. The inspection should be carried out thoroughly according to the principle of risk assessment, testing according to probability.

“It is necessary to change the customs supervision procedure in the direction of trade facilitation. Allowing businesses to make general customs declarations by province, city, or larger area and bring goods to customs clearance locations in the region under customs supervision is the practice of Western Europe – North America countries. This will reduce congestion, overload gateway ports, and also cut costs for businesses,” added Mr. Khoa.

At the same time, Mr. Khoa suggested not to apply policies that increase logistics costs in general, such as transportation costs, fuel prices, BOT prices, fees, and other related fees, and reduce port infrastructure fees. The sea of ​​Hai Phong city and here comes Ho Chi Minh City.

The VLA representative also suggested that ministries and branches effectively manage the implementation of legal documents such as Decree 146 on the declaration of sea freight charges by foreign container shipping lines and limit the increase in freight rates. Transport is out of control as it is today.

In addition, it is not allowed to increase and take measures to reduce or eliminate some of the current 12 types of high sea surcharges. This is an urgent issue that our country’s manufacturing, importing, and exporting enterprises are asking to be solved.

(Source: Vneconomy)