Difficulties in orders, capital, administrative procedures and the risk of criminalization in the economy push businesses into special difficulties, according to Board IV.
The Private Economic Development Research Board (under the Prime Minister’s Advisory Council on Administrative Procedure Reform, Board IV) has just sent the Prime Minister the results of a survey on business difficulties and economic prospects by the end of 2023.
The survey was coordinated by Board IV VnExpress conducted at the end of April with nearly 9,560 enterprises, showing the economic picture with many dark colors. Accordingly, over 82% of enterprises said that they plan to reduce their scale, suspend or stop doing business in the remaining months of this year.
Among the enterprises still in operation, more than 71% want to reduce more than 5% of the labor (in which, 22% reduce by more than half). Nearly 81% of units said they would reduce sales by more than 5%, of which, the rate of over 50% reduction was 29.4%.
Businesses also show low confidence when more than 81% have a negative or very negative assessment of the economic outlook in the remaining months of this year.
Four major difficulties businesses are facing, including lack of orders, difficulty in accessing capital, administrative procedures and fear of criminalization in economic activities. Meanwhile, the support of the local government has not met the requirements of reality, with 84% of enterprises rating it as “inefficient”.
To get rid of difficulties, businesses propose many solutions to handle these four bottlenecks. First, they recommend reducing costs to increase competitiveness. For example, the Government could extend the 2% VAT reduction deadline to the end of 2025 instead of the end of this year. Labor costs also need to be further reduced through lowering union fees, social insurance and considering changing the threshold for personal income tax.
Enterprises also proposed a number of special mechanisms, such as allowing them to receive a tax refund within 3 months after exporting the order and a combination of inspection and post-inspection measures to control risks and combat fraud. tax fraud. Or reduce corporate income tax for export units to 5-10%.
Next is increasing access to loans for the economy. Enterprises believe that there should be a preferential credit package for key production industries and fields, in which resources are reserved for small and medium enterprises.
“It is not advisable to squeeze credit for the real estate segment related to the construction of social housing, hospitals, schools, and production infrastructure”, according to the report of Board IV.
Workers at Lam Viet Wood Factory (Binh Duong) during production hours. Photo: Dinh Trong
The next step is to improve the business investment environment. Accordingly, the authorities should limit the inspection (no more than once a year), do not issue new documents to avoid the burden of taxes, fees and administrative procedures for businesses. The authorities also need to finish investigating the current cases as soon as possible and issue a resolution not to criminalize economic relations.
Finally, in order to cope with external difficulties, enterprises proposed the Government to increase trade negotiations to diversify input markets (especially in the garment, footwear, furniture industries…) and output to reduce dependence on traditional markets.
Authorities also need to increase their capacity to forecast economic trends, update development incentives, and warn about risks.
According to the report of the Economic Commission, the health of businesses is declining, the economy is very difficult. In the first four months of the year, nearly 79,000 businesses registered to set up and return to the market. On average, about 19,700 new businesses are established and returned to operation every month.
However, every month, 19,200 units withdraw from the market. Many businesses face great debt repayment pressure, so they have to transfer and sell shares at very low prices, in many cases to foreign countries.
Source: VNExpress
