The dynamism and the efficiency of private businesses have been recognized by many institutions. A recent survey conducted by the taskforce on implementing of the Investment Law and Enterprise Law on the quality of private businesses shows that if  state owned enterprises need 436.5 million dong of stockholder equity in order to create a job, private enterprises only need 224.1 million dong. The ICOR of the private sector is always lower than other sectors.

No preferential interest rates for private businesses using high technologies

For the last three years, Vinaxuki has been well known as having the highest localization ratio in the automobile industry. Under the current regulations, enterprises get the preferential tax rate of 0-5 percent and enjoy preferential tax rates which are no higher than three percent, if they make mechanical equipments weighing more than two tons. Vinaxuki now makes the equipments weighing 7-10 tons.

“Though the policies are clear, our company still cannot access the preferential loans, and we still have to borrow money at commercial interest rates,” said Bui Ngoc Huyen, Vinaxuki’s General Director.

“We appealed to the Prime Minister, who then released a decision to give preferences, requesting the Vietnam Development Bank to settle the case. However, when we contacted the bank, we were told that the bank did not have money,” he said.

“We cannot owe tax, even for one day, but state owned enterprises can delay tax payment,” he complained.

“I hope that the ongoing Party Congress will highlight the “renovation” spirit. I wish that private and state owned businesses can be treated equally,” he said.

Private businesses inferior because they are not keen on “lobby”

Meanwhile, Nguyen Xuan Hoang, General Director of ACH Construction Consultancy Company, complained about the difficulties in accessing land fund.

In February 2010, the businessman was given the patent for his new construction technology which allows reducing the costs by 20 percent.

“With the advantage in technology, we wanted to find a land plot to build low cost houses for low income earners. However, it is so difficult for small enterprises like us to access the land fund,” he said.

“Only state owned enterprises which have close relations with local authorities, can access land fund. However, we are only good at technology, not at lobbyIng. And we have to persuade other investors to use our technology,” Hoang said.

In order to encourage private businesses to develop, the State needs to protect the governance based on the  laws. This is at the root of renovation. If the State differentiates state owned enterprises and private enterprises in accessing resources, development will be hindered.

Private and state owned enterprises should be equal

Le Minh Hai, General Director of the Vietnam Germany Steel Corporation, said: “The Enterprise Law says private and state owned enterprises are equal, but it is quite different in reality. Commercial banks always prefer lending to state owned enterprises”.

When reconsidering the policies in order to help improve the quality of private businesses, the taskforce on implementing the Investment and Enterprise Laws suggested that private businesses should be appreciated as the pillar of the national economy. Therefore, the Government needs to treat them equally in encouraging their investments.

Source: VietnamNet