[SingViet]

Enterprises fight to survive challenges

HA NOI — High interest rates, drastic market fluctuations and lower consuming remain major obstacles to the development of Vietnamese enterprises.

Viet Nam Chamber of Commerce and Industry president Dr Vu Tien Loc said that to the end of June, 40 per cent of the 580,000 registered businesses had announced their failure, stopped working or entered into bankruptcy.

The number of enterprises in extremely difficult situations had doubled compared with the same period last year.

Viet Nam Association of Small and Medium-sized Enterprises president, Dr Cao Sy Kiem, said 30 per cent of 22,000 member enterprises were making no progress, 30 per cent were having difficulty and the remainder were at risk of bankruptcy.

Many enterprises had not declared their failure due to complex procedures.

Kiem said 30 per cent of trade villages targeting exports have had to reduce production.

In the first half of the year, breakdown situation happened in many cities and provinces such as Can Tho, Da Nang, Quang Tri and Quang Nam.

Viet Nam Trade Village Association president Vu Quoc Tuan said high interest rates, input price rises and a decline in international consumption were the main reasons why enterprises found it difficult. Enterprises specialising in production of wood, rattan and jewellery consumed in the domestic market, have still withstood.

Finance Minister Vu Van Ninh has submitted a number of measures to support enterprises, including the extension of tax deadlines and tax reduction and exemption, for adoption by the Assembly on July 21.

The proposed time of extension of tax deadlines, tax reduction and exemption is from August 11 to the end of the year.

Under the Finance Ministry's plan, small and medium-sized enterprises and those that had more than 300 workers will have their deadlines for enterprise income tax delayed a year.

The amount of this tax is expected to be about VND10-13 trillion (US$485 million-$630 million).

Enterprise income tax that applies in tax extension enterprises, will down 30 per cent, totalling VND2.5-3.7 trillion ($121-197.6 million), according to the ministry's plan. — VNS