“Developing the private sector is essential and prudent. We need decisive policies to develop the private sector along with other economic sectors to create a breakthrough for the economy,” affirmed Deputy Prime Minister Ho Duc Phoc in his speech at the group discussion on May 15.
Clear interpretation is needed to put the regulations into practice
According to the Deputy Prime Minister, Vietnam should study neighboring countries such as South Korea and Japan, which have successfully developed their private sectors. South Korea, in particular, experienced significant growth during the 1960s–1980s and is now home to global leaders such as Samsung, Lotte, and Posco.
“A transparent and equitable mechanism that does not discriminate against the private sector is necessary, along with incentives to ensure a level playing field,” the Deputy Prime Minister stated.
He suggested reconsidering the regulation of inspecting businesses only once a year. Such a rule might create “loopholes,” especially in areas related to food safety, fire prevention, and other critical aspects.
Similarly, the proposal to waive on-site inspections if enterprises comply with the law could be problematic. Inspection authorities cannot accurately determine an enterprise’s compliance without an on-site visit. It would be more prudent to conduct inspections only when there are indications of violations.
“Clear interpretation is essential to ensure that the regulations are effectively implemented,” the Deputy Prime Minister advised.
Deputy Prime Minister Ho Duc Phoc. Photo: PHAM THANG |
Regarding the enterprise support fund, the Deputy Prime Minister suggested that the fund should focus on training high-quality human resources, technology transfer, market research, and rewarding outstanding private enterprises. He emphasized the need to consider the fund’s ability to safeguard its capital and suggested that providing loans to enterprises might not be the best use of the fund.
The Deputy Prime Minister also addressed the current needs of private enterprises, which include preferential treatment in technology, human resources, and market access. Additionally, he highlighted the importance of a transparent administrative procedure implementation process, aligning with the principle of “a facilitating government, an executing business.”
On tax incentives, he suggested that preferential tax regulations should be designed for specific industries and incorporated into tax laws to ensure fairness for all economic sectors and prevent budget shortfalls.
In the field of bidding, there are cases where direct appointment is necessary to create a driving force for small and medium-sized enterprises and to provide overall support for domestic enterprises.
Regarding other issues, the Deputy Prime Minister suggested: “The Resolution should authorize the Government to elaborate on the policies to ensure flexibility and adaptability to the practical economic and social situation in the context of deep international integration and unpredictable international developments.”
Longer tax incentives are recommended
Delegate Nguyen Nhu So (Bac Ninh province) agreed with the draft Resolution. He also made several suggestions to ensure the Resolution’s practicality and effectiveness.
Specifically, he proposed extending the exemption period for corporate income tax to five years, followed by a 50% reduction in the taxable amount for the next five years. This extended period would provide a more substantial “financial space” for innovative startup enterprises.
Delegate Nguyen Nhu So (Bac Ninh province). Photo: PHAM THANG |
“A two-year exemption and a 50% reduction in the following four years, as proposed in the draft, are too short compared to the actual development cycle of innovative startups,” said Delegate So. He further explained that this timeframe does not provide a strong enough incentive for enterprises to accumulate internal resources, invest in research and development, and engage in production and business activities.
Regarding regulations on supporting science, technology, innovation, digital transformation, and human resource training, Delegate So suggested adding a clause on supporting intellectual property registration and protection costs. He also recommended streamlining related procedures, especially for small and medium-sized enterprises and innovative startups.
“In the context of the global economy’s shift towards a knowledge-based model, intangible assets – particularly intellectual property rights – play an increasingly crucial role in determining a country’s competitiveness,” Delegate So explained. “For startups, where the core products are technology, algorithms, or ideas, timely protection is essential to prevent brand hijacking, technology replication, or legal risks.”
Regarding incentives for households doing business to become enterprises, Delegate Hoang Van Cuong (Hanoi) expressed concern that the regulation on exempting small and medium-sized enterprises from corporate income tax for the first three years from the date of enterprise registration certificate issuance would lead to “policy abuse.”
Delegate Hoang Van Cuong (Hanoi). Photo: PHAM THANG
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“Establishing a business, operating it for three years tax-free, and then closing it down to re-register under a spouse’s or child’s name, or even hiring a motorbike driver to be the nominal owner, is easy because business registration is straightforward,” said Delegate Cuong. He added that this would not create stable businesses.
He also worried that this policy could create an unfair advantage for non-abusing startups that might go bankrupt. Therefore, the Hanoi delegation suggested that instead of a three-year continuous exemption, the first year should be tax-free, and the following years should have a 50% reduction.
REPORTERS
– 20:12 15/05/2025
Unlocking the Potential: Unveiling the Vision for Private Sector Growth
“(Chinhphu.vn) – The National Assembly’s Resolution on special mechanisms and policies to promote the private sector is a concise document, marking a new breakthrough in private sector development. The drafting agency has worked diligently to ensure the Resolution’s timely passage by the end of this week.”
“Empowering Family Businesses: The Backbone of the Private Sector”
Establishing a robust knowledge base and network, empowering family-run businesses to thrive sustainably, professionally, and across generations.
Unleashing Economic Growth: Presenting Five Key Policies to Empower the Private Sector
The draft resolution of the National Assembly on mechanisms and policies to develop the private sector proposes a number of specific and unique mechanisms and policies. This is a timely initiative to institutionalize the Politburo’s direction in Resolution No. 68-NQ/TW, creating a “springboard” to unleash the latent resources and productive capacity of the private sector, thereby fostering a new impetus for economic growth.
The Ultimate Northern Development: Unveiling the $63 Billion Transformation of a County into a Thriving Special Zone with Mega Projects
This island district has seen significant infrastructure investment, creating a substantial advantage in its quest to become one of Vietnam’s leading special zones.
A 2% Cut in VAT Proposed for Fuel, Washing Machines, and Microwaves
“On May 13, at the 9th session of the 15th National Assembly, the Government proposed to further reduce the value-added tax (VAT). This bold proposal aims to stimulate economic growth and ease the financial burden on businesses and consumers alike.”
