Viet Nam Chamber of Commerce and Industry Chairman Vu Tien Loc

The Government has issued supportive policies for domestic enterprises to cope with difficulties due to the COVID-19 pandemic. However, the policies have not reached expected efficiency while the difficulties are predicted to continue next year. Viet Nam Chamber of Commerce and Industry Chairman Vu Tien Loc spoke to Viet Nam News about this issue.

What are the affects on local enterprises’ production and business from the governmental support packages for enterprises due to the COVID-19 pandemic?

Government's policies supporting the domestic business community are very accurate and timely in the context of the COVID-19 pandemic.

In a short time, the Government launched comprehensive support solutions in many fields, including tax, credit and market. Enterprises are permitted to delay payment of loans and tax.

If those policies are implemented effectively, they will be support businesses to overcome current difficulties.

However, some policies have reached expected efficiency. Some others have brought troubles for businesses with troublesome administrative procedures and unclear criteria because those policies do not follow closely actual events.

The purpose of those policies is good, but there is a large gap between policy and practice, so efficiency of the governmental policies is limited.

However, with their own efforts, the enterprises have coped with difficulties to maintain production and business.

According to statistics, in the first months of this year, up to 60 per cent of businesses had to suspend or stop operations due to the pandemic. This rate was the highest ever on record.

In recent years, the Viet Nam Chamber of Commerce and Industry (VCCI) and associations have regularly carried out surveys on business situations and collected opinions from the enterprises to submit to Government and the National Assembly. Most of the recommendations from the business community have been compiled in the policies.

We need to strengthen cooperation between government agencies and the business community in building and implementing those supportive policies.

The pandemic has also created an opportunity for Viet Nam to promote reform of administrative procedures. If the administrative procedures are simplified, a lot of problems would be solved.

Besides supportive packages, reforms in institution and administrative procedures will accelerate production and help business projects come into operation.

In addition, one of the core competitive abilities of every economy as well as of the business community, especially micro, small and medium sized enterprises (MSMEs), in the future will be resilience.

In order to strengthen the resilience of the business sector, the State should have policies tin place to improve their resilience and sustainable development.

VCCI and the UNDP work with partners to develop a programme on improving resilience of Vietnamese businesses, especially MSMEs, to respond to natural disasters and the pandemic.

Viet Nam is one of the countries most affected by climate change, so creating a business community with sustainable development and resilience will be very important.

How has the domestic business community developed this year?

2020 was a very difficult year for the Vietnamese business community and they have also shown their survival ability. Development of the business community during the pandemic is one of the most important reasons why Viet Nam has gained an economic growth during the global economic recession.

At the same time, the business community has realised they need to strengthen their resilience and sustainable development because the pandemic and the current trade wars have disrupted global supply chains.

A number of firms have adopted sustainable development strategies in production and business so they have survived when having the pandemic and even found opportunities to develop production.

Meanwhile, some other businesses have not really focused on sustainable development. When having big changes in the global market, they have immediately fallen into difficulties, some have even gone bankrupt.

The reality of this year will be a valuable lesson for the Vietnamese business community in reviewing development strategy and business models in the future. They must aim for sustainable development and pay attention to both social and environmental issues. This aim is not only for large enterprises and but also for MSMEs.

I think responsible business and sustainable development will be the long-term development strategies of the local enterprises.

According to the Government’s Decree 126, from 2021, enterprises must temporarily pay 75 per cent of the whole year corporate income tax by the end of the third quarter. However, enterprises said that they are facing difficulties due to the pandemic so they could not estimate how much their corporate income tax to pay. If their estimated figure is less, they will be fined. How does VCCI do to help the enterprises to solve this issue?

VCCI has received many complaints on this issue from the local enterprises. The chamber will work with the Ministry of Finance and representatives of the business community to find a satisfactory solution.

I think new tax policies should be suitable with the current difficult situation. The pandemic is controlled at home but not yet controlled in the world so the enterprises still continue to face difficulties. In the future, they have more business opportunities in some markets while those opportunities could reduce in some others.

An important issue now is that the State should create conditions for businesses to survive and develop in the context of pandemic and then, the State will have more tax revenue from those enterprises.

What does the business community expect in the next five years?

The biggest wish of the business community is that governments of countries in the world work together to prevent the pandemic. This is the most important thing for businesses in setting their production and business plans next year and beyond.

They hope that the Government's policies would be stable and transparent, creating favourable conditions for the businesses to carry out sustainable development strategy.

Viet Nam has made great efforts to improve the business and investment environment, but so far it has not yet achieved its goal of becoming one of four countries having the most competitive economies and the best business environments in the ASEAN region.

The business community hopes that Viet Nam will gain this goal in the next five years. If Viet Nam achieves this goal, I believe that the domestic business sector will develop strongly.

Meanwhile, businesses also need to upgrade operations and management according to the orientation of sustainable development and digital transformation. That is the way forward.

VCCI will promote activities to support for businesses in sustainable development and digital transformation, from raising awareness, providing information to organising training courses on development models.

Government should continue reforming the domestic business environment. — VNS