Nguyen Van Than, chair of the Vietnam Association of Small and Medium Enterprises (SMEs), shared his perspective about the issue with VietNamNet.

Could you comment on the current state of the private enterprise sector, particularly small and SMEs?

The participation of private enterprises in the market is trending downward, and the entrepreneurial spirit and business activity lack vigor. In January 2025 alone, 58,300 enterprises departed the market. Before the Covid-19 pandemic, the ratio of enterprises entering the market to those leaving was 1.5; now, it is 1.2.

Nevertheless, the private sector is rising robustly, contributing approximately 50 percent to GDP and, notably, generating over 82 percent of jobs. Of this, the domestic private enterprise segment accounts for 28 percent of GDP, surpassing all other economic sectors, including the FDI sector. 

Vietnam is entering a new era with ambitious growth targets. With the private economy contributing 50 percent to GDP, the sustainable double-digit growth in this sector would bolster the momentum needed to achieve over 8 percent growth in 2025 and double-digit growth in 2026-2030.

What fiscal and monetary policies can help this economic sector grow?

Regarding fiscal policy, I hope the Government will soon submit to the National Assembly the plan to revise the Corporate Income Tax Law to reduce taxes for SMEs. This would nurture revenue sources and support their reinvestment in production and business activities. 

The Law on Support for SMEs already stipulates that “SMEs shall be entitled to a lower corporate income tax rate than the standard rate for a limited period”; however, no specific policies have yet been implemented to enforce this provision.

The draft amendment to the Corporate Income Tax Law proposed to the National Assembly suggests a 15 percent rate for enterprises with revenues below VND3 billion and 17 percent for those with revenues of VND3-50 billion.

We think the proposal is insignificant because most enterprises with revenues of below VND3 billion do not generate profits, and therefore, they don’t have to pay income tax. Furthermore, the proposal only applies to some SMEs, not the encouragement for the whole Vietnamese business community.

Therefore, we hope that the Government proposes reducing the corporate income tax rate to 15-17 percent for all SMEs in Vietnam. It is also necessary to amend the Law on Support for SMEs, so that the enterprises can effectively benefit from other State support policies.

Regarding monetary policy, we hope there will be policies that encourage banks to promote lending with mortgages to take shape in the future. 

Currently, only 30-35 percent of SMEs can access bank loans with existing collateral assets, while only a few banks offer loans based on future-formed assets, and these are provided in a limited, incremental manner. If enterprises are granted loans under this model, they could access a substantial capital pool.

The target of one million enterprises by 2020 and 1.5 million by 2025 seems to have been missed. What do you think needs to be done to achieve the goal of 2 million enterprises by 2030?

I believe there are several approaches, such as setting growth rate targets for localities which the Government previously applied. The Government should assign key performance indicators (KPIs) for SME development to localities. This will force localities to improve the business environment and roll out the red carpet for enterprises. We are ready to monitor, supervise, and evaluate the implementation of these indicators for the Government and Prime Minister.

Additionally, it is essential to continue reforming the institutional regime, improving the investment and business environment, and reducing administrative procedure processing times by at least 30 percent. These are specific KPIs outlined by Party Chief To Lam.

Moreover, fostering business confidence is crucial. I believe appropriate sanctions should be applied to entrepreneurs and enterprises that fail to fully meet their tax obligations to the State, rather than banning them from leaving the country. Violations of an economic or civil nature should be addressed through remedies such as economic restitution or other administrative measures. The goal is to enhance respect for the rule of law while alleviating unwarranted concerns among entrepreneurs and enterprises.

Many real estate enterprises are seeking solutions to their difficulties. What are your thoughts on this?

Real estate enterprises are currently facing challenges in land valuation. If the Government regulates the land use fee at 10-12 percent of real estate selling prices, this difficulty will be resolved.

Tu Giang - Lan Anh