(Fixed assets) have been deducted”. However, with the general and non-specific regulations as above, both tax officials and enterprises are confused in implementation because they require enterprises to refund VAT but do not stipulate the refund procedures and the authority to decide on the amount of VAT refunded.
The Government needs to study the implementation of the regulation that most of the purchased goods and services that are subject to input tax deduction must be paid through banks, except for single purchases with low value. This policy will limit cash payments, control revenue, expenses, and business income, and on that basis, help tax authorities collect sufficient and correct taxes and enforce tax arrears on businesses. This regulation can prevent tax evasion, tax fraud, and fraudulent purchase and sale of invoices for tax refunds as has happened. However, in reality, the banking network is still limited, payment through banks is still delayed, and the banking system itself is slow to innovate payment technology, etc., which still raises concerns about the accuracy, safety, convenience, and speed of buying and selling activities, especially in remote areas. This affects the production and business process of SMEs. Therefore, the government needs to determine a specific roadmap for applying bank payments to SMEs to ensure feasibility and convenience for businesses.
Regulations on tax rates also need to be improved to make them simpler for taxpayers and tax authorities, thereby reducing the possibility of violations by both taxpayers and tax officials. Currently, the application of 3 VAT rates of 0%, 5% and 10% is still relatively suitable for our socio-economic situation and conditions in this period, when the production and business efficiency of different sectors still has many differences. However, it is necessary to move towards applying a unified VAT rate to all types of products and services, facilitating the operations of enterprises, tax management and creating equality and transparency in the implementation of tax obligations. For example, there are enterprises with a 0% tax rate, but their input is already 10%, so where will the deduction be made? Second, there are output items that are 10%, but when the input is 5% and 0%, calculating like that, sometimes the business will suffer losses and sometimes the state will suffer losses. Therefore, to
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To move towards a fair and manageable path in society, the government should consider introducing a single tax rate of around 8%.
Third, research and supplement regulations on fixed asset depreciation.
To further encourage enterprises to invest in technological innovation and avoid falling behind in technology compared to other countries in the region, it is necessary to allow enterprises to quickly depreciate fixed assets. Fixed asset depreciation is a very important issue in the production and business activities of enterprises. If the depreciation rate is high, it will help enterprises recover capital quickly and vice versa, if the depreciation rate is low, capital recovery will be slow and capital may be lost due to invisible wear and tear of fixed assets. On the other hand, high or low depreciation rates also change the corporate income tax payable during the year.
Therefore, it is necessary to expand incentives for SME expansion investment by recognizing the right to accelerated depreciation of enterprises investing in building new production lines, expanding scale, innovating technology... for fixed assets invested according to government regulations. In addition, these preferential terms need to stipulate the method of deduction and limit the accelerated depreciation rate according to the normal deduction rate to create a legal basis for sub-law documents.
Some other solutions
Simplify and perfect the tax rate system and tax codes for import and export goods.
Currently, the General Department of Customs has shortened the time for customs procedures and import-export tax imposition. However, the inconsistency in applying codes and calculating taxes has caused many businesses to lose time and money as well as affecting their production and business activities. Therefore, it is necessary to consider and accelerate the amendment and supplementation of decrees and circulars guiding the implementation of the Customs Law in the direction of simplifying procedures and customs clearance processes for goods, publicizing the list of tax rates and imports, creating favorable conditions for Vietnamese SMEs to self-declare, apply codes and apply prices.
Need to expand the application of the model of enterprises self-declaring taxes
Strengthening the review of the pilot self-declaration of taxes in Ho Chi Minh City for nationwide replication, which needs to be audited annually in accordance with
international practices, simplifying requirements on accounting books and annual financial statements for SMEs in accordance with international practices.
Simplify the accounting and tax collection regimes to suit the qualifications of accounting staff in SMEs. Eliminate all non-tax contributions of SMEs. At certain times when there are changes in taxes, it is necessary to organize tax training courses for accounting staff as well as owners of SMEs so that they are aware of the nature of taxes and voluntarily pay taxes. Avoid the phenomenon of tax staff causing much trouble for businesses.
Eliminate lump-sum tax or fixed tax rates for tax officials because this makes it easier for tax officials to apply tax rates to businesses and increases the possibility of tax evasion.
Regarding the implementation of policies , the Government or in other words, the General Department of Taxation needs to direct local tax agencies to periodically conduct dialogues with enterprises according to the regulations issued by the Ministry of Finance to promptly detect problems in the implementation of tax laws, including VAT refund issues, to promptly resolve them for enterprises. The General Department of Taxation also needs to promptly issue regulations on compensation for damages (interest payments) for enterprises in cases where it is the subjective fault of the tax agency in delaying the resolution.
It is necessary to promote support services for SMEs in tax payment, promote the application of information technology for tax management, innovate the organization and staff, and build a new cultural style for tax officers with the goal of tax agencies and tax officers being companions of enterprises.
In the context of the rapidly increasing number of SMEs, tax management shows that compared to large enterprises, the legal understanding of SMEs is still low, tax evasion and tax fraud still occur a lot, negatively affecting the business environment. Therefore, it is also necessary to rectify the work of business registration and business management after establishment.
Finally, the Government needs to encourage the development of tax consulting and tax accounting services to provide tax and accounting services to help SMEs understand tax policies and do accounting work well. Expand free support services for
Taxpayers to guide taxpayers to perform well in accounting, invoice and document management.
2. Solutions to enhance the impact of credit policy
2.1. On the government side
To improve the effectiveness of credit policies for SMEs and truly encourage SMEs to develop in the process of international economic integration, the Government can consider the following solutions:
First, improve the environment and financial institutions.
Nowadays, the competitiveness of enterprises is clearly demonstrated through the ability to mobilize and attract money through official financial channels because with large capital, these channels can meet the needs of enterprises with reasonable capital costs and low risks. Therefore, the completion of official financial institutions of a country is not only a criterion to evaluate the development level of a modern market economy, not only reflects the competitiveness of that country but also contributes significantly to improving competitiveness and enterprises.
The State needs to build and develop legal, financial and social foundations for the operation of financial institutions, creating trust in investment, lending and guarantee activities. Simplifying the financial reporting system of Vietnamese SMEs, making accounting activities of enterprises easier, and the requirements for financial reporting of banks thereby also reducing complexity - an obstacle in accessing bank capital is minimized.
Vietnam should also promote a social credit environment and establish a SME credit rating system. Vietnam is currently in the early stages of a market economy. There is a lack of a comprehensive social credit system and social certification structure. A market economy is a credit-based economy, and social credit is a kind of intangible asset that enterprises use to obtain bank loans for their sustainable development. Therefore, enterprises should improve their credit awareness and establish good credit relationships with banks, such as timely loan repayment, to create mutual respect. To achieve this, we need to promote the establishment of a SME commercial credit rating system and a personal financial credit system. The collection and sharing of credit information should be promoted to provide credit support for SME loans and personal ventures.
The State should soon issue regulations on allowing the establishment of private credit information centers. Private credit information centers will provide information of businesses applying for loans, especially SMEs, to banks when requested by banks. The provision of information by credit information centers will
faster, more efficient and will likely reduce the barriers to mortgages and pledges, as the lending bank can track the payment history and business activities of the borrowing enterprise more frequently. Thus, the Credit Center will increase the loan capacity, especially unsecured loans, and indirectly help borrowers (SMEs) access credit more easily.
Second, promote the establishment and organization of the Credit Guarantee Fund.
use
The models of some countries show that financial support is necessary for
SMEs. Most of their methods are through credit guarantee activities, helping businesses access capital easily, lending to businesses at preferential interest rates or normal interest rates. In general, the current trend is that countries limit direct credit. In fact, the situation and conditions of Vietnam are very suitable for applying the credit guarantee method for SMEs when Vietnam has become an official member of the WTO. The credit guarantee method is a trend of the era of international economic integration, in accordance with WTO practices. The Credit Guarantee Fund model ensures that businesses can access capital without collateral. This is considered a bridge between banks - those with capital and businesses - those in need of capital. Banks are profit-making entities, their goal when lending is to ensure the recovery of the loan plus the interest incurred. Therefore, SMEs often encounter difficulties in borrowing capital from banks because not all enterprises can ensure their ability to pay. The establishment of the Credit Guarantee Fund will help enterprises borrow capital more easily, and at the same time, this Fund will also pay off the bank loans of enterprises when enterprises are unable to pay.
Credit guarantee funds will be the most effective alternative to preferential credit programs that the State provides to SMEs. Preferential credit programs are creating inequality among domestic enterprises and enterprises in the same industry. With preferential interest rates higher than market interest rates, the profit margin of enterprises receiving preferential credit will be higher than that of enterprises not receiving preferential credit. So this is not the result of
Competitive efforts in business activities are due to the advantage of enterprises from being granted preferential credit. Moreover, enterprises that receive this preferential credit will have difficulty in entering the markets of other countries when WTO regulations are not financially preferential.
Although Decision No. 115/2004/QD-TTg dated June 25, 2004 on amending and supplementing the regulations on establishment, organization and operation of the Credit Guarantee Fund for SMEs was issued, up to now the establishment and implementation of the Fund's activities have not been effective. It is necessary to recognize the difficulties in establishing the Fund in order to propose necessary solutions to further promote the Fund's operational efficiency. First of all, the biggest difficulty is the source of capital to establish the Fund. The operating capital of the Guarantee Fund is formed from capital sources allocated from the provincial and municipal budgets; capital contributions from credit institutions, enterprises and professional associations, organizations representing and supporting SMEs; Legally sponsored capital from organizations and individuals, additional capital from the results of the Credit Guarantee Fund's operations. In reality, capital from the budget is very limited, so the fund's capital scale must rely on capital contributions from other subjects. Other capital contributors are hesitant because there are no regulations on capital withdrawal and transfer of capital contributions from organizations and individuals after contributing capital to the Guarantee Fund. Therefore, the State needs to have more detailed and specific regulations to ensure the rights of individuals and organizations contributing capital. The regulation that to establish a fund, a minimum of 30 billion VND must be required has caused difficulties for some provinces in establishing the fund because they cannot find enough money. Therefore, the State should have more open regulations depending on the conditions of each province that can allow the establishment of a fund with a capital level lower than 30 billion. Regarding the contribution rate to the fund, it should be mandatory for units to implement and introduce this fund to businesses, and especially should establish a separate website to clearly state the policies and conditions for guarantee and support and have links to the provinces and cities that have established the fund.
There should be regulations allowing SMEs to register for loans in advance from the credit guarantee fund, based on the application, operating situation as well as mortgaged and pledged assets to grant the enterprise a credit limit. When the enterprise has
If there is a need, the loan procedure will be carried out, which will reduce the loan application time of the business, meeting the capital needs quickly and promptly for the business.
At the same time, it is also necessary to specify in detail the operation, management as well as the issue of inspection and supervision of the content of activities to enhance the effectiveness of the Credit Guarantee Fund. Local authorities must also pay attention, conduct field surveys, and give more active guidance measures so that many funds can come into operation in the coming time. Credit Guarantee Funds operating in the right direction and targeting the right subjects will be highly effective, contributing to solving capital difficulties for SMEs.
Third, strengthen cooperation with foreign financial institutions.
This is a necessary and important measure while Vietnam's capital resources are limited and the capital needs of SMEs are high, the State cannot meet all the needs of a large number of enterprises. Moreover, this is also an inevitable trend in the integration process. In the process of integrating into the international economy, SMEs will participate more actively in import and export activities, which requires enterprises to have sufficient financial potential. Therefore, expanding cooperation with foreign credit institutions is a right direction. There are two main forms to attract capital from foreign organizations.
The first way is to create conditions for foreign credit institutions to be established in Vietnam. These institutions will directly carry out credit guarantee activities for SMEs. However, this method is quite complicated because it requires guarantees from local authorities. In addition, there are differences in project evaluation and market between these institutions and enterprises. This will lead to difficulties for enterprises in accessing capital.
The second way is through cooperation between foreign credit institutions and Vietnamese banks. The institutions will be the capital providers. The banks will undertake credit guarantee activities, manage the guarantee fund, and directly assess and decide to grant guarantees to customers. This form will create more favorable conditions for businesses to learn about and access capital sources more easily.
Fourth, it is necessary to innovate and loosen lending conditions.