Businesses call for capital and procedure support along with tax solutions

Fear of the fact that businesses encounter difficulties

Plenty of fiscal policies are currently in place, but the Ministry of Finance (MoF) has stated that they will continue to review policies in order to have a plan to support businesses when necessary.

Vietnam saw approximately 100 thousand businesseswithdrawing from the market in the first six months of 2023, with an average of 16.6 thousand businesseswithdrawing from the market each month. This figure decreased when compared to the average level of businesses exiting the market within one month of the first five months of 2023. According to data from June 2023, 7,098 businesses were returning to operation, the highest level in the first half of the year, a 215% increase over the same period in 2022. In contrast, there were 12,333 businesses withdrawing from the market in June 2023, a 3.1% growth over the same period in 2022.

Regarding assessing business activities in the first half of this year, the Business Registration Department (Ministry of Planning and Investment) acknowledged that the business registration situation in June showed positive signals, with the number of businesses entering and re-entering the market reaching the peak. However, the number of businesses leaving the market is also cause for concern. According to the business community, production and business are currently facing numerous challenges as a result of declining domestic consumption and exports. Therefore, businesses expect that the Government and the cityauthorities will offer solutions to support them to overcome difficulties.

Hanoi, as a specific locality, demonstrates that the city's small and medium business community has grown steadily, positively contributing to the Capital's socio-economic development, creating 45% of GRDP, more than 30% of the city's budget, and employing more than 50% of the labor force. However, Mac Quoc Anh, the Vice Chairman and General Secretary of the Hanoi Small and Medium Business Association, stated that the Association has received various feedback from businesses regarding the operating situation, particularly the decline in domestic consumption and exports. Furthermore, due to high-interest rates on bank loans for production, and complicated procedures, businesses continue to have difficulty accessing credit capital.

Remove obstacles to support business growth

The Association drew the attention of public opinion, experts, and managers at a recent seminar organized by the Vietnam Federation of Trade and Industry. The current focus is on dealing with problems and creating new development space for businesses, thereby findingopportunities for economic growth in the remaining months of 2023 and 2024.

The growth rate can act as a " thermometer" of the economy. The growth rate in the first six months of the year was modest, at 3.72%, a low increase compared to GDP in the same period of the previous ten years. Due to the strong influence of Covid-19 at the time, this figure was only slightly higher than the growth rate of 1.74% in the same period of 2020. This has been also a time when the Vietnamese economy and business community face various challenges as a result of the global economic downturn. Vietnam's economic growth has been sluggish.

The solution to the current "problem" is to help businesses rebound and grow. Many experts believe that long-term and radical policies are required to solve problems for businesses.

According to Phan Duc Hieu, a member of the National Assembly's Economic Committee's Standing Committee, businesses are currently encounteringnumerous challenges in market, finance, capital, and competitiveness. In times of market difficulty, competition takes place not only between domestic businesses but also among regional businesses. Mr. Phan Duc Hieu also claimed that the most prominent challenge is the cost of covering and maintaining production and business activities. In the above context, it is necessary to implement institutional reforms in order to remove obstacles for businesses, because inappropriate institutions not only create administrative procedures but also a significant financial burden and compliance costs./.