Lowering the cost burden on enterprises

In recent times, in the face of the common challenges that have had a significant impact on the people and businesses, the National Assembly, the Government, ministries, and localities have been making efforts to find suitable and timely solutions. However, this is not an easy task given the high demand and limit    ed resources. Many challenges sometimes go beyond Vietnam's ability to address, such as reducing orders or international competition.

During the 5th session of the 15th National Assembly, many issues were clarified, answering difficult questions about where, how, and why these challenges exist. Many recommendations have been put forward, but the biggest challenge at the moment is that only a few solutions can be chosen instead of all.

With the present challenges confronting businesses, Mr. Hieu believes that the government would investigate methods to support expenses and cash flow, so that firms may at least weather these difficult times and wait for possibilities when the market rebounds.

Some potential remedies include lowering VAT (Value Added Tax), giving workers with subsidies to directly share the burden with corporations, and implementing activities such as tax deferrals and land rent.

Furthermore, there is a need to overcome legal and institutional framework hurdles that impede or create delays in specific commercial activities.

Concerns have been raised regarding the possibility of additional rules that would raise expenses. For example, 14 organizations recently signed a statement expressing concern over the Draft Regulation on Recycling Standards, which determines how much money firms must contribute to the Environmental Protection Fund.

Many difficulties, in particular, have been detected but not remedied in a timely way, such as the car inspection tale. Everything is still being discussed, and a strategy is likely to be created, but the backlog in car inspections has caused enormous economic harm, hurting not just individual vehicles but also transportation and corporate activities.

In terms of remedies, the government should initially focus all efforts, in collaboration with ministries and local governments, on totally resolving hurdles within the institutional framework, such as fire prevention and vehicle inspections.

Second, when new rules are issued that may increase corporate expenses, greater controls should be applied. Experts feel that the government should avoid from releasing further rules that will raise company costs in the near future. However, in circumstances where it is required due to legal obligations or international commitments, there should be procedures in place to financially assist firms in complying with the rules.

Third, one of the current issues is the external policy challenges. Global minimum taxes and carbon taxes are two examples of policies that have a considerable influence on firms' efforts to find markets and compete globally.

In particular, the government can assist enterprises in counting and confirming CO2 emissions in order for them to export. This method has two goals: it helps firms in tough times and it provides a long-term answer for company recovery and expansion when the chance occurs.

Mr. Hieu observes that there is a conflict in terms of activities. Both the government and the ministries are working hard to improve the investment and business climate. However, according to corporate assessments, the situation is not improving and may be worsening.

According to a poll performed by the Vietnam Chamber of Commerce and Industry (VCCI), the impression of a better business climate has declined dramatically. This is significant because it implies that, while we may be acting, the method may not be suitable. Finally, the perception of the business community remains the most essential metric.

There is still opportunity for fiscal measures to boost firms at the moment, but it is limit ed and depends on resources and other macroeconomic balances. However, if the emphasis is on enhancing the business environment, the potential is limit less, implying that we have a very large room to outperform what businesses expect.

In the short term, the Prime Minister should give timely direction through decrees and directives in resolutions, with an emphasis on reducing regulations that create financial burdens.

Regulations, in reality, not only create processes but also incur considerable expenditures. For example, under the proposed rule on recycling cost criteria, enterprises who do not recycle packaging items themselves will be required to donate a determined amount of money to the Environmental Protection Fund for recycling purposes on a yearly basis. These expenses are significant, with some companies having to pay tens or hundreds of billions of dong.