15:39 | 12/09/2017 Economy- Society
(VEN) - Hanoi is encouraging household businesses to transform into companies.
They say a man’s home is his castle. In Hanoi and other towns and villages in Vietnam, a person’s home is also his or her business.
There are 152,000 household businesses in Hanoi, but they contribute less than two percent to the city’s total budget revenue. While the capital is encouraging those businesses to transform into companies, many of them still hesitate because of their modest administration capability and unclear development orientation, as well as complicated administrative procedures.
But while Hanoi, as well as Ho Chi Minh City, are trying to point out the advantages of registering as an enterprise, business households point to advantages of their current setup. They have only six types of bookkeeping while small and medium enterprises have dozens. They pay excise tax but no value added tax (VAT) or personal or corporate income taxes and can easily recruit employees.
City authorities have told relevant agencies to formulate business promotion policies to 2020, review and simplify administrative procedures, and hold investment promotion conferences to hear the views of household enterprises. A number of agencies have already cancelled 60-70 percent of their administrative procedures and are offering online public services. The city also held supply-demand connection conferences to facilitate the sale of goods, paved the way for businesses to access bank capital, assisted enterprises in investment and product promotion, and supported business and financial administration training for owners and managers.
The Hanoi Department of Taxation is developing a project to assist startup businesses and small to medium-sized enterprises (SMEs) from 2017-2020. The project is designed to provide practical assistance for businesses, including law and policy-related information in general and service assistance for newly founded enterprises, and to encourage household businesses to transform into companies.
In the short term, Hanoi will focus on introducing the benefits that household businesses would enjoy after transforming into companies. Formalities related to business registration, tax declaration, invoice issuance, and more will be made available on the department’s website (hanoi.gdt.gov.vn). There will be information specifically designed for newly founded enterprises on hanoi.gov.vn, including information about tax procedures, accounting, and invoice issuance, etc.
The Hanoi People’s Committee has set a target of having 200,000 additional enterprises established in the city from now to 2020. This target requires government guidelines and consistent cooperation from organizations, associations, and agencies.
Mai Son, deputy director of the Hanoi Department of Taxation, said that according to current regulations, the inspection and examination of enterprises will be implemented only once a year, and household businesses, which transform into companies, shall benefit from incentives offered to startup businesses.