Vietnamese businesses are currently grappling with numerous challenges as they navigate turbulent global market conditions and long-standing domestic issues. A recent workshop titled "Tax and Financial Health for Sustainable Development," organized by the General Department of Taxation and Lao Dong Newspaper, highlighted these difficulties and the government's response to help bolster the private sector.
Deputy Chairman of the Vietnam Chamber of Commerce and Industry (VCCI), Hoang Quang Phong, reported alarming statistics indicating the struggle many companies face, noting, "By the end of November 2024, around 173,200 businesses had exited the market, representing a 9.1% increase compared to the same period last year." On average, over 15,700 businesses have closed their doors each month, painting a stark picture of the economic environment.
To address these challenges, several government agencies have implemented timely support measures aimed at restoring confidence and increasing business activity. The Ministry of Finance has proactively issued revisions to tax procedures and regulations, along with advocating for policies related to tax exemptions, reductions, and deferments to alleviate the financial burden on companies.
According to VCCI's assessment, the Ministry of Finance has made significant strides in reforming and modernizing tax regulations, which has garnered praise from the public and business community alike. With more than 99% of businesses now using electronic tax filing systems, the era of digital transformation is underway across Vietnam. Phong emphasized, "The Ministry has been at the forefront of reforming administrative processes, enhancing its governance approach, and leveraging technology to improve efficiency and transparency."
Through measures aimed at streamlining bureaucracy, the Ministry has pledged to simplify legal regulations and remove overlapping procedures, thereby reducing administrative burdens on businesses. Placing emphasis on creating a more favorable business environment, the Ministry of Finance has facilitated discussions with enterprise communities to address pressing tax-related issues.
At the workshop, Phong noted, "Since the dialogue sessions commenced, VCCI, together with the Ministry, has resolved over 450 business concerns, ranging from tax refunds to customs procedures, and the inconsistent application of policies at various localities." This responsiveness is reflective of the Ministry's commitment to supporting and accompanying the business community as they face economic headwinds.
Yet challenges still remain. A recent VCCI survey identified significant hurdles within tax compliance, with 31% of businesses reporting bureaucratic frustrations. These obstacles are particularly pronounced among micro, small, and medium-sized enterprises (MSMEs). Phong acknowledged this, stating, “To improve the tax experience for our constituents, we must continue to push for digitalization and transparency within tax management.”
The VCCI has called for enhanced transparency and specific guidance on tax policy implementation, insisting on consistency across localities to prevent confusion among businesses. To support small businesses, proposals were made for specialized policies and training to aid compliance.
"We believe," Phong concludes, "that the dedication of the General Department of Taxation, along with proactive business support, will help establish a more modern, transparent, and equitable tax management system moving forward."
International perspectives lend credence to the progress as well. Daisuke Noguchi, a JICA (Japan) expert, noted the effectiveness of Vietnam's electronic tax systems, comparing them favorably to those used globally. He remarked, "Unlike Japan, where eTax allows businesses to file taxes online, Vietnam's platform facilitating direct tax registration for foreign enterprises within e-commerce is groundbreaking."
Recognizing Vietnam's advancements, particularly within electronic tax management and international compliance standards, Noguchi emphasized, "Deeper digital transformation and adherence to international standards will be key to sustainable economic growth for Vietnam." Identifying technology as both the catalyst and foundation for enhanced governance, it's clear the path forward for Vietnamese businesses lies heavily within these reforms.
The Vietnamese government's multifaceted response to stimulate economic growth and assist struggling enterprises highlights its commitment to fostering resilience within the business community. By addressing regulatory complexity and encouraging modernization, stakeholders hope to create not only recovery but also sustained growth.
