More than 80% of businesses plan to downsize, suspend or stop doing business

DNHN - Recent research by the Research Board for Private Economic Development (Board IV) indicates that. This is a concerning number that raises many questions about the near-term prospects of businesses and the economy.

According to Board IV's survey, 10.9% of businesses are expected to cease operations and file for dissolution; 12.4% are expected to suspend operations; 38.5% are expected to significantly reduce their scale, and 20.0% are expected to reduce their scale slightly. In addition, 71.2% of businesses anticipate a labor force reduction of more than 5%, with 22.2% anticipating a reduction of more than 50%. This could cause tens of thousands of workers to lose their jobs and struggle to maintain their daily lives. In addition, 80.7% of businesses anticipate a revenue decline of over 5%, with 29.4% predicting a decline of over 50%. This significant decline in revenue ratio not only affects the profitability of businesses but also poses an imminent threat to their very existence.

The confidence of businesses in the macroeconomy and industrial economy is another noteworthy aspect of this survey. According to Board IV, up to 81.4% of surveyed businesses view Vietnam's economic prospects for the remainder of 2023 as negative or very negative. Similarly, up to 83.7% of businesses in the Industry view the sector's economic outlook for 2023 as negative or very negative, with 29.6% rating the outlook as extremely negative. This demonstrates businesses' lack of confidence in the resilience of the economy and destabilizes the business climate in general.

Some business groups are more severely affected than others. Ho Chi Minh City enterprises, construction enterprises, micro, small, and medium-sized enterprises, and non-state enterprises exhibited higher levels of negative assessment than other groups. This demonstrates that these organizations face numerous challenges and obstacles, particularly in maintaining and expanding their businesses.

In this "dark" picture, Board IV classified enterprise difficulties into four main categories. The difficulty of orders ranks first, accounting for 59.2% of the total number of businesses encountered. The third is the risk of criminalizing economic transactions, which accounts for 31.1% of the total. In particular, only 16% of businesses rated the local government's operating efficiency and support as relatively effective, while 84% rated it as less effective.

Many specific recommendations and suggestions from the business community have been recorded in this survey. Particularly, these proposals emphasize the removal of immediate bottlenecks to boost confidence and increase internal resources so that businesses and the nation's economy can overcome the current challenging period.

The extension of business support policies that have been effective during the COVID-19 crisis is one of the most important proposals. This includes a 2% reduction in the value-added tax through 2025, as opposed to just this year. In addition, it is proposed to reduce labor costs by rescheduling, delaying, or reducing fees related to social insurance and union dues, and by considering a new personal income tax rate in line with current conditions. in.

Additionally, businesses want to expedite the tax refund procedure to avoid prolonging the current duration. Proposing a unique mechanism, such as allowing businesses to receive a tax refund within three months of exporting a given order. To create favorable conditions for businesses to comply with the law, it is necessary to combine inspection and post-inspection measures for risk management and tax fraud prevention.

Regarding loan access, businesses plan to investigate preferential credit packages for key manufacturing industries and fields, including assistance for small and medium-sized businesses.

The enterprise also proposed to enhance the business environment, expeditiously complete the investigation of current cases to foster stability and increase production and business-related concentration. In addition, a commitment must be made not to criminalize economic and civil relations, as occurred during the previous difficult period between 1997 and 2000. Additionally, businesses require assistance for continued market access and business expansion.

In the current business environment, enterprises face numerous obstacles and challenges. The macroeconomic outlook and industry outlook inspire little confidence. However, it is hoped that the business community's suggestions and recommendations will result in the implementation of measures to support and improve the business environment, thereby assisting businesses in overcoming this difficult period and achieving success. upcoming expansion and recovery.

Lam Nghi