Speaking at the Government’s Permanent Conference meeting with typical state-owned enterprises during the Lunar New Year, Minister of Finance Ho Duc Phoc said that state-owned enterprises have played a significant role in solving employment, contributing to the state budget, and carrying out the mission of regulating the shortcomings and downsides of the market when the economy is facing difficulties.
“GIANTS” OF THE STATE CONTRIBUTE 17% OF DOMESTIC REVENUE
The Minister exemplified that without state-owned commercial banks, it would be very difficult to implement monetary policies. Without corporations like Petrolimex, it would have been very difficult to cope with the energy crisis and petroleum products. State-owned enterprises also make significant contributions to society through infrastructure construction and social welfare.
Regarding contributions to the state budget, the leadership of the Ministry of Finance clearly stated that in the report on the financial budget for 2023, there are 676 state-owned enterprises, including 19 groups and corporations.
In 2023, state-owned enterprises contributed 261 trillion VND in tax revenue, accounting for 17% of domestic taxes. In the first two months of this year alone, state-owned enterprises contributed 36,894 trillion VND to the budget.
“Over the years, state-owned enterprises have been more sustainable in business areas, and their tax debts have also decreased. Currently, the tax debt of state-owned enterprises is 17,032 trillion VND, while other businesses owe about 150 trillion VND in taxes,” said Minister Phoc.
CHALLENGES IN STATE CAPITAL INVESTMENT INTO ENTERPRISES
At the conference, Minister Ho Duc Phoc discussed some more concerns and suggestions from delegates.
Regarding the replacement of Law No. 69/2014/QH13 on the management and use of state capital invested in production and business activities in enterprises, the Ministry of Finance is deeply concerned and has sought opinions from multiple rounds. However, there are units that are not interested in institutional issues and law amendment, which may cause difficulties in implementation in the future.
Some current shortcomings of the regulations are that state-owned enterprises directly invested in with less than 100% charter capital are not subject to regulation. The management and investment of capital into these enterprises are carried out through representatives to exercise the rights of state capital owners.
In addition, the investment in capital, including the supplementation and withdrawal of state capital in enterprises, is not proactive, timely, and flexible enough. For example, the supplementation of capital for enterprises is regulated by budget laws in the field of development investment but has not been clearly defined in public investment…
Therefore, the Ministry of Finance wants to hear the opinions of businesses, especially regarding autonomy in production and business, management of inputs and outputs, the right to decide on salaries to attract talent, and solve emerging scientific issues…
“Why do other companies offer high salaries while our company cannot? Why can’t we innovate like others? Therefore, we need policies that allow businesses to have autonomy in salary payment,” Minister Phoc raised the issue.
At the conference, two state “giants” suggested to increase their charter capital early, namely, Vietnam Airports Corporation (ACV) and Saigon Newport Corporation.
Accordingly, to achieve the set goals, ACV proposes to promptly approve the increase in capital from retained profits of the corporation, moving towards capital increase through the airport area to reduce the burden on the state budget for investment, upgrading, and repairing airport areas and providing proactive investment opportunities for port enterprises.
The leadership of Saigon Newport Corporation also proposed that the Ministry of Finance consider providing medium and long-term capital to ensure the implementation of the key projects, ensuring sustainable competitiveness, and implementing the development strategy and 5-year production, business, and investment plan of the 2021-2025 period that has been approved by competent authorities, specifically approving and facilitating the increase of the charter capital from 6,931 trillion VND to 10,445 trillion VND.
Contributing opinions on the amendment of the Law on the Management and Use of State Capital invested in production and business activities in enterprises, the leadership of Saigon Newport Corporation proposes to adjust the regulation on the distribution of state-owned enterprise profits to allow some efficient state-owned enterprises to retain the profits after tax deductions according to regulations to implement large, effective investment projects and retain more charter capital to serve development investment, ensuring international competitiveness and integration.
Regarding retained profits, the Minister shared that he was very concerned about this matter. However, the decision to increase capital for which enterprise to invest in is decided by the Prime Minister. It is not possible to create mechanisms that allow widespread investment without knowing how effective it will be.
According to the Minister of Finance, the important thing for business development is the market, but businesses must prove that they have good products and competitiveness. The market is crucial because it assesses products and evaluates the efforts of businesses. As Americans say, “supply-side economics” means input and supply are very important. If people use clean electricity, we must also use clean electricity; if people use new technology, we must also use new technology and good materials to create good, competitive products.
In terms of institutions, Minister Ho Duc Phoc emphasized granting autonomy to enterprises, even the Law on Bidding in effect, when encountering difficulties, it should be amended immediately.
The Minister also suggested that state-owned enterprises discuss green, circular, and the role of the digital economy. For each industry, careful consideration must be given. If there are deficiencies in the mechanism, it must be submitted to the Government for decision-making. If it is beyond the Government’s authority, it must be submitted to the National Assembly for early decision-making so that it can develop strongly and sustainably. The core of the economy is the enterprise, which has a supporting role but is also a breakthrough factor in the economy.
In 2023, there were many difficulties, but the total revenue of state-owned enterprises reached about 1.65 quadrillion VND, exceeding the plan by 4%; pre-tax profit was about 125.8 trillion VND, exceeding the annual plan by 8%; contributed about 166 trillion VND to the state budget, exceeding the annual plan by 8%.
State-owned enterprises still hold significant resources in terms of capital, assets, technology, and high-quality human resources. They make a significant contribution to the state budget and create jobs for workers.
