Tax policies still unapproachable to science-technology businesses in HCMC

The Ho Chi Minh City (HCMC) Department of Science and Technology has lately launched various activities and policies to support companies to register for a science-technology business (STB) certificate to enjoy preferential conditions. However, these favorable policies seem still out of reach to them.

Tax policies still unapproachable to science-technology businesses in HCMC

Thanks to the encouragement of the HCMC Department of Science and Technology, the number of STBs last year nearly doubled that in 2017, reaching 74 firms. The recent opening of the Science-Technology Business Club in the city has also contributed to the smooth operation of those companies.

However, the deepest concern of STBs is tax issue, which was raised in the conference ‘Developing Science-Technology Businesses in HCMC’.

According to Mr. Do Hoang Trung, CEO of IDEA Technology Joint Stock Co., there are several highly appreciated policies to foster STBs; yet in reality, not many STBs can approach them, especially those related to tax.

He therefore hoped that the HCMC Department of Science and Technology could work with the HCMC People’s Committee to publish detailed regulations and guidance for state units so that STBs are able to truly enjoy this precious prestige. Simultaneously, he suggested that there should be support for the launch of science-technology products into the market and state projects.

As said by Mr. Vo Tien Dung, Deputy Head of the Division to Propagandize and Aid Tax Payers under the HCMC Department of Tax, one of the most interesting issues is the policy that STBs are exempted from business tax in the first four years to gain taxable revenues, along with a 50 percent tax discount in the next nine years.

Another notable new detail is that STBs are not exempted from business tax if they cannot meet the requirement on income from science-technology products in that fiscal year, which should be at least 30 percent of the total revenues. What is more, conditions and procedures for STBs to receive these preferential policies are now regulated in more details.

Commenting on these new policies, Mr. Nguyen Chi Sy, Director of Tan Duc Han Electrical Engineering and Trading Joint Stock Co., said that the changes still cannot answer the demands of STBs. He explained that the requirement of 30 percent revenue from science-technology products is not feasible at all even with giant firms, resulting in a half-hearted investment in this aspect. He proposed that the government should apply other more practical aids like helping companies to register for ISO Certificate.

At the moment, the HCMC Department of Science and Technology is carrying out various useful programs to foster scientific research among enterprises, technological renovation, startup activities, and commercialization of research results. It always welcomes all applicable suggestions from STBs, including those regarding tax. It is also collaborating with related state units to find feasible methods to promote the further development of STBs in the city.

Mr. Nguyen Khac Thanh, Deputy Director of this department, shared his hope that STBs in HCMC will grow as to quality as well as quantity. He expressed the will to aid all businesses in need to sign up and develop highly potential products, yet stated that these STBs themselves need to develop new products which can meet the market’s demands.

By KIM THANH – Translated by Tuan Lu

Other news