Support for SMEs: Barriers from policy to enforcement

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Thanks to timely support policies, many businesses have overcome difficulties.Photo: H. Duu

Ministries, branches and localities

Currently, Vietnamese firms, especially small and medium enterprises, are benefiting from many supportive policies.Specifically, since 2017, the Law on Small and Medium Enterprises Support has been put into effect with the aim of creating a policy mechanism to help small and medium enterprises improve their competitiveness and operate more efficiently.After that, in 2020, the economy and the business community have fluctuated before the Covid-19 pandemic, a series of policies to support enterprises of the State were issued.Therefore, many people expect that this is a good opportunity to support businesses.

In fact, the policies to support enterprises amidCovid-19 have many similarities with the support policies from the Law on Small and Medium Enterprises Support.However, to emphasize supporting enterprises to overcomeCovid-19, policies to respond to Covid-19 this year are prioritized and promoted.

Typically, in early March 2020, when the Covid-19 pandemic started, the Prime Minister issued Directive No. 11 / CT-TTg dated March 4, 2020 on urgent tasks and solutionsto solve difficulties for production and business, ensuring social security to cope with the Covid-19 pandemic.According to the Vietnam Chamber of Commerce and Industry (VCCI), ministries, branches and localities have quickly joined and issued about 95 documents on measures to remove difficulties for production and business.

Therefore, policies on service prices, land rent, taxes, fees, charges have been implemented in the direction of great support for businesses.VCCI stated for example, ministries and branches issued 19 circulars adjusting and reduced 30 fees and 14 fees for fields that generate a lot of documents and procedures to revive economic sectors.

Fees and charges have a minimum reduction of 50% compared to the old regulations.

This helps the total number of reduced fees and charges that businesses and people benefit from totalVND500 billion.In addition, the General Department of Taxation said it had received more than 179,000 requests for tax and land rental extension, equivalent to about 25% of the 700,000 businesses expected to initially benefit.

Still difficult to access

Mr. Le Viet Cuong, Director of San Art Cooperative (Hanoi), said that legal procedural problems are a huge barrier for small and micro enterprises to accesssupportivepolicies.

For example, many Vietnamese enterprises register business in one place, but produce in another place, so the locality will never confirm to enterprises for fear of responsibility, leading to enterprises being unable to meet theconditions.

Similarly, Ms. Nguyen Thi Kim Phuc, Director of Bac Binh organic agriculture enterprise (BinhThuan), said that the bank agrees to give businesses a preferential loan to invest in factories and equipment, but enterprises must have reciprocal and periodicCapitaLandrepayment period.Therefore, Ms. Phucsaid that the bank offersunclear conditions to attract enterprises, at the beginningenterprisesoften face difficulties to have money immediately to repay debts.

Because of the above problems, the operation of smalland medium enterprises is still very difficult.In addition, according to some enterprises, the supportive policies for enterprises from the Law on Small and Medium Enterprises Support have not been received, are unknown and have not been eligible for enforcement.

According to the Ministry of Planning and Investment, after two years of implementing the Law on Small and Medium Enterprises Support, the guiding document system is still slow, some contents have not been implemented in practice;some supporting regulations are not attractive enough to encourage businesses;resources for implementation are limited compared to the huge demand of businesses, while some localities only balance about 10-15% of the planned needs.

Mr. Dau Anh Tuan, Head of the Legal Department of VCCI, said that many enterprises complained, underestimated the convenience when accessing information about support policies, and the usefulness of support policies for each sector and economic field.

Therefore, businesses want clear and transparent support policies to ensure that businesses, business households and workers can access and understand the scope, object, conditions, order, and procedures, furthermore, the conditions need to be loosened.

A representative of VCCI said that what needs to be learned here is that there is a big gap in policy design and implementation.Therefore, there is a need to strengthen collaborative efforts between government agencies and the business community both shaping policies and the organization of policy implementation.