Workers at Trung Dung Co Ltd, a manufacturer of elastic threads and yarn in Tan Trieu Commune in Hanoi’s suburban district Thanh Tri. The company employs around 200 employees. (Photo: VNA)

Hanoi (VNS/VNA) – Prime Minister Nguyen Xuan Phuc has issued adirective on implementation of the Law on Support for Small- and Medium-sizedEnterprises (SMEs).

Tax deductions, land allocation programmes and the establishment of appropriatecredit lines along with a comprehensive legal framework are among the tasksordered by the PM.

His directive, issued last week, was meant to bring to live the highlyanticipated SMEs law, which took effect at the beginning of the year.

SMEs, or enterprises with capital of less than 100 billion VND (4.36 millionUSD), account for 95 percent of Vietnam’s business community.

PM Phuc assigned the Ministry of Planning and Investment (MPI), incollaboration with other concerned ministries and people’s committees, to speedup the issuance of the decree on the organisation and activities of the fund topromote SMEs.

He also asked them to issue a range of circulars on human resource developmentand establish a network of counsellors to help SMEs, as required in the SMEslaw.

The Ministry of Finance (MoF) was asked to revise the corporate income taxcode, including establishing a specific income tax rate for SMEs as well asregulations for tax waivers or deductions for SMEs within start-up incubators,technical centres and common working spaces. Organisations that established a“production distribution chain” in which 80 per cent of SMEs within the chaincompleted manufacturing in Vietnam will enjoy an exemption or reduction oftheir income tax.

The PM also asked for adjustments to tax reduction regulations for start-upsand SMEs which have transitioned from business households, in order to boostthe businesses’ viability.

Aside from tax cuts, the PM also asked the finance ministry to issue guidelineson land use fee exemptions or reductions for SMEs, provide financial supportfor the network of counsellors to aid SMEs and elaborate on a basic accountingmodel for micro-sized enterprises to implement.

According to the directive, the Ministry of Science and Technology shall assumethe prime responsibility for issuing guiding policies to help SMEs study andadopt modernising technologies, as well as aid SMEs’ acquisition and mastery ofnew technologies through consulting, research and training activities.

The Ministry of Natural Resources and Environment, in coordination withpeople’s committees of the provinces and centrally run cities, is tasked withguiding localities to allocate land funds for the formation and development ofindustrial clusters, agro-forestry, fishery and seafood processing plants forSMEs within the year.

The Government leader also asked the Ministry of Justice to amend theGovernment’s Decree on legal support for enterprises, with December 12 beingthe deadline.

The planning ministry is charged with serving as the focal point to coordinatewith other ministries and localities to identify the goals, recipients andpriority support areas to build and implement policies and programmes tosupport SMEs as per the law.

To support SMEs across the country, a national information portal will also beopened, developed by the planning ministry, which will feature a diverse rangeof information, from expert guidance and policy news to science and technologydocuments.

The funds for the SMEs supporting programmes will be handled by the financeministry and localities.

The State Bank of Vietnam will hold the prime responsibility for setting upcredit packages with preferential interest rates for SMEs as well as developingan interest rate subsidy policy regarding loans for SMEs, start-ups orenterprises participating in value chains.

Business community organisations such as the Vietnam Chamber of Commerce andIndustry (VCCI) and Vietnam Association of Small and Medium Enterprises(VNASME) are asked to work together with relevant ministries and localauthorities to intensify information dissemination on the Government’s legalsupport for their member enterprises.

According to the General Statistics Office of Vietnam, in the last five months,52,300 new enterprises have been established with total registered capitalreaching 516.9 trillion VND – up 3.5 and 6.4 percent compared to the respectivefigures from 2017.

However, in the same period, 33,400 enterprises were shut down (up 3.9 percentcompared to last year) with the total number of enterprises having completedfilings for bankruptcy reaching 5,500, up 18.1 percent compared to the sameperiod last year.

Meanwhile, the Government aims to have at least one million “healthy”enterprises by the end of 2020, which means that ea🏅ch year, at least a total of150,000 new enterprises must be set up.-VNS/VNA