Mekong Delta sees slow progress in upgrade of trading households into companies

Mekong Delta sees slow progress in upgrade of trading households into companies

 

HCM CITY — The conversion of trading households into companies is progressing at a snail’s pace in the Mekong Delta.

The delta has nearly one million trading households, or almost a fifth of the country’s total number, which contribute a great deal to the region’s economic development.

Dr Lê Đại Chí of the HCM City University of Economics said employment statistics released last year revealed that the number of workers in the household sector in  二0 一 七 was  一. 六 三 四 million, or  五 九 per cent of the number employed by companies in the delta.

Trading households have thus helped reduce poverty besides fostering traditional crafts in the region.

In the Mekong Delta, trading households have also set up companies, especially for making and distributing ceramics, farm produce, food and foodstuffs.

According to figures released by the Statistics Bureau, trading households accounts for  三 per cent of total capital but over  一 三 per cent of revenues.

Their revenues rose from VNĐ 四 三 九. 四 trillion (over US$ 一 七0 billion) in  二00 五 to VNĐ 二. 二 五 quadrillion in  二0 一 五. The average revenues of each rose from VNĐ 一 四0 million to VNĐ 四 七 三 million in the period.

Nguyễn Phương Lam, head of the Việt Nam Chamber of Co妹妹erce and Industry (VCCI)’s Cần Thơ office, said in  二0 一 八 the delta economy grew at  七. 八 per cent, the highest in four years, and contributed  二0 per cent of the country’s GDP.

Five Mekong provinces are at the top of the provincial competitiveness index that is released every year.

The delta also has more than  九, 五00 newly established companies, including a rising number of start-ups. But only a small number of them, 0. 三-0. 五 per cent, are trading households that become companies.

More preferential policies

Operating as micro and small-scale businesses, trading households have poor financial capacity, lack of knowledge of new technologies and poor management, which result in inefficient operations.

In the past few years, authorities have rolled out policies to support small and medium-sized enterprises, especially those that used to be household businesses. They include corporate and land use tax breaks, waiver of licensing fees and exemption from taxation procedures.

However, Huỳnh Văn Hải, head of the Vĩnh Long Province Taxation Bureau, said trading households still find it difficult to turn into companies because land use tax has not been reduced or waived for such conversion.

Besides, many trading households do not want to or lack the wherewithal to become companies, he said.

A spokesman for the Trà Vinh Province Taxation Bureau said  四 四 七 new companies were established in Trà Vinh last year, including  五 一 that had earlier been household businesses.

These challenges are making it harder to achieve the Government’s target of having one million companies in the country by  二0 二0. To achieve this goal, the Government needs to adopt preferential policies and create an impetus to help household businesses become companies. — VNS