Relaxing tax and accounting rules to favor household business grow
Registering under the Enterprise law will bring economic benefits and trademark reputation to the household businesses. However, so far cumbersome accounting has been a barrier preventing the household businesses to formalize.
A cashier of a private clinic in Dien Bien Phu street said her business earns a monthly revenue of nearly 500 million VND (22 thousand USD) and registered at the Ba Dinh Tax Sub-department. Those businesses employing more than 10 workers and earning the same revenue as this clinic will have to register under the Enterprise Law. However, the clinic owner showed concern over the formalization process. “We are a household business. If becoming a registered enterprise, we have lots of work to do in terms of formalizing accounting books and using accounting software,” said the clinic owner.
Staff of Ba Dinh Tax Department explain any concerns about tax.
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The Chairman of VCCI Vu Tien Loc said that in order to create one million enterprises by 2020, it is necessary to facilitate the founding of new ones and encourage the household businesses to register under the Enterprise Law. “There are currently 1.8 million household businesses but fear of cumbersome accounting rules is preventing them from registering”, Loc said. The VCCI chairman stressed that simplified accounting rules will encourage household businesses to formalize. “In an economy increasingly integrating, foreign business partners prefer to have contact with enterprises, not business households because the household economy delivers a sense of lacking transparency”, Loc pointed out.
Hung Vinh Limited Liability Company specializing in food services in Dong Da district used to be a business household. It used to have a small food store of 20 tables and employ 8 to 9 workers and the revenue was up to 900 million VND per year. By the end of 2009, wanting to benefit from the government policy of assisting small enterprises and to better serve the increasing number of customers, Hung Vinh decided to formalize. “Being a registered enterprise brings many advantages as we become a legal entity having seal which make us more credible when securing and signing business contracts,” Hung Vinh said.
The VCCI chairman Vu Tien Loc said that it’s important to expand tax information dissemination to those who are about to set up an enterprise or to the household businesses to formalize. Relaxing tax procedures would encourage people to register under the Enterprise Law.
Currently, the General Department of Taxation and local tax departments have initiated the nationwide “Cooperation with start-up enterprises” program to assist businesses in tax matter. To help enterprises get access to information from tax departments, Mr. Tri said that tax departments have established direct assistance posts and setting up specific phone numbers and email addresses.
The deputy general director of the General Department of Taxation Nguyen Dai Tri said that tax agencies have set up a site on the “Cooperation with start-up enterprises” inside the webpage of the General Department of Taxation and local tax departments. Besides providing necessary information, businesses can send request for assistance through the site.
Nguyen Thanh Ha, the national sales director of MISA Joint Stock Company specializing in accounting software said that this company has signed with the General Department of Taxation to donate free accounting software for startups. Accordingly, all newly established enterprise from 2017 to 2018 will be supplied with free software. Mr. Ha said that “we have staff always available at tax departments to help enterprises use the software” – the representative of MISA said.
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Vietnam news in brief - August 24
Read The Hanoi Times to stay up to date on developments in Vietnam.
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