Businesses in the North Coast: Efforts to Overcome Difficulties

These challenges force the enterprises to resort to alternatives of either being doomed to failure or making a break- through for possible success.

In 2013, according to the data of the General Statistics Office, the number of newly established enterprises reduces while the number of businesses who temporarily suspend or resume operations increases.

 

Specifically, in Quang Ninh, the number of newly-established businesses has decreased by 2.4 percent and the number of businesses who temporarily suspend or resume operations are up 32.9 percent; in Haiphong, the number of newly-established enterprises has reduced by 6.5 percent and the number of businesses who temporarily suspend or resume operations has increased by 31.1 percent; in Hai Duong, the number of businesses who temporarily suspend or resume operations has declined by 15.8 percent. Among 20,000 enterprises who are stuck in a tough business situation in Haiphong, the number of businesses who temporarily suspend or resume operations accounts for approximately 30 percent.

 

According to Pham Chi Lan, the economist as well as the former Vice President of Vietnam Chamber of Commerce and Industry (VCCI) , the main drawbacks of the economic growth of Vietnam is the trust of the private sector has been declined. The private investment has been plummeted from 15 percent of GDP (2007-2010) to about 11.5 percent of GDP (2013). The Provincial Competitiveness Index (PCI) report shows that the firms tend to reduce investment or stop expanding their business.

According to the statistics of the recent business survey, 25 percent of the survey participants said that they are facing the troubles with the complexity of the administrative procedures and bureaucracy. In addition, the enterprises are facing many difficulties during the process of filing tax; among of them, 20 percent of businesses do not understand the taxed groups and tax rates; 22 percent of businesses do not understand the rules and procedures of filing tax, 23 percent of businesses said that tax officials have not given clear explanation and caused troublesome to the businesses and besides, the regulation of tax payment procedures often change, which the micro and small enterprises (SMEs and MEs) finds difficulties to update immediately.

 

Besides, the companies are not satisfied with the tax policies because the tax rate and tax filing processes are not fair and thorough for all tax payers; there are many large enterprises who make huge income but find ways to evade tax while the SMEs and MEs who are fully compliant with the provisions of the taxpayers gain less or nothing from tax incentives.

 

According to Dan Duc Hiep, Vice Chairman of Haiphong City’s People’s Committee , 2013 is a very difficult year but the businesses in the area have also made great contribution to the 7.5 percent growth of the city. The number of the enterprises filing tax of more than VND50 billion has increased and the exports have increased by nearly 15 percent. Faced with the difficulty of the enterprises, in recent years, the leaders of the Haiphong city have implemented many preferential policies to share the difficulties with local enterprises. Regarding the fiscal policy, the City's representatives always consult with the city's banks to create favorable conditions for businesses to access capital. The planning land and land use has been directed towards openness, transparency and stability. Besides, the city has also issued a number of policies to support the businesses in the area such as ​​rescheduling of land tax, electricity, and social security for the businesses who are in face with difficulties. The city has also established an "Tackling with the difficulties" division organisations to solve difficulties for enterprises and provide supports for the development of businesses in the area.

 

Mr Nguyen Huu Bon, Director of Viet Thang Co.,Ltd, Haiphong

 

The businesses appreciate the business incentives of the authorities; however, the mechanisms and policies to remove difficulties for enterprises are not really radical. Specifically, the land rent rates are too high; the land rent rates have increased 5 to 12 times of the current rent rates of the land leasing contract signed in force. Recently, we have received a notice from the tax department of the Hong Bang district about the land rent paid in 2012 and 2013. The land rent which our company shall pay 5 times higher than that of the current contract. This causes drawbacks to the businesses. Compared to large investment, the businesses find it difficult to create profit and stabilise the businesses if we are charged at very high land rent rates. More than ever, we need strong attention of the city’s government.

 

I look forward to having more dialogues between businesses and the city's government on specific issues such as bank loans due to the facts that there are not many companies can reach the mortgage loans for land because of the planned projects still on papers and high land rents to remove difficulties for SMEs and MEs.

 

Ms Luong Thu Huong, Member of Hai Duong Provincial People’s Council, Chairperson and Director of Truong Duc Co., Ltd

 

The Hai Duong People's Committee always creates the most favourable mechanism to promote the business operations. However, to better serve the regional market as well as other domestic and international markets,with the increasingly requires the local businesses to improve both quality and quantity of products to reach the common standards in many respects. I suggest the provincial leaders, along with the FDI promotion activities, should also pay more attention to the non-state sector enterprises and the enterprises in agriculture and rural development for the long term because those are the backbone of the economy. Under a strict management of the functional committees, there should be a focus on the businesses who invest in building a chain of mini commercial centres as well as wholesale and retail stores of essential consumer goods and agricultural materials.

 

We continue to make use of our available resources, actively interact with other businesses and investors to find new directions and add values to our products.

 

Mr Tran Van Lan, General Director of Haiphong Auto JSC

 

The businesses expect that in the future, there should be solutions to remove difficulties before such the issues become more serious. We ourselves are facing difficulties in compliance with the tax policies, particularly in Section 2, Article 3 of No. 71/2010/TT-BTC of May 7, 2010, guiding tax assessment for automobile and motorbike traders on the basis of business automobiles, motorbike priced to sell cars and motorbike on the invoice priced lower than the regular trading price on the market. We propose reviewing Section 2, Article 3 of No. 71/2010/TT-BTC of May 7, 2010 of the Ministry of Finance. It is noted that at the same time, the businesses should be allowed to list the price in deal with the regular trading price on the market and sell the items at the market price or lower than 5 percent of the market price and have them taxed by the actual prices. Other automobiles and motorbikes which are listed irregularly from the market prices will be valued at fixed price and sold based on the normal transaction price in the market and taxed at a fixed rate.

 

Mr Pham Van Hong, Rector of the Viettronics Technology College

 

Currently, the number of SMEs in Haiphong City is estimated at 5,298. Their contribution is significant. The weakness of the SMEs and MEs in Haiphong is a limited access to the market information. Most companies are only interested in solving the problems relating to the product sales through the direct sales system. To tackle with this issue, the companies should promote market research activities, capture information timely and accurately as well as improve the marketing activities. 

 

In my opinion, the Haiphong's authorities need to lift barriers which restrict the market access of the SMEs and MEs, creating a transparent and equal environment among different types of enterprises through a number of specific measures such as promoting the international economic integration activities, inspiring the entrepreneurial spirit, raising the awareness of society for SMEs, accelerating the business-oriented administrative procedures to support businesses, and enabling the underwriting policies or financial supports for SMEs and MEs.

 

Mr Doan The Xuyen, Director of Phuc Xuyen Co., Ltd, Quang Ninh province

 

The Quang Ninh People's Committee and functional agencies always set a good layout to facilitate the business activities and attract investment. I hope in the future, the local government continues to promote what has been achieved and continue to accompany businesses.

Aiming to create a healthy business environment and build up an sustainable local brand for the development of the business community to contribute to the public transport development of Quang Ninh, we will continue to learn more about the organisational management of the transport enterprises in other provinces, even about the management models of the Chinese enterprises, on the actual context of Quang Ninh. To encourage the people to involve in the public transportation, particularly by bus, we have established the advocacy team, who act as "communicators" to send a message to the public that "transportation by bus is a way of civilisation, saving, user-friendliness, convenience and contribution to reduce traffic congestion.