Recent data from the General Statistics Office showed that in July 2024, 6,837 businesses registered to temporarily suspend operations, an increase of 26.2% compared to the previous month. Additionally, 7,035 businesses ceased operations while awaiting dissolution procedures, up 30.2% from June 2024 and 33.8% from last year.
Overall, in the first seven months of this year, 125,500 businesses exited the market, an increase of 10.7% year-on-year. On average, more than 17,900 businesses have exited the market each month. Production and business activities of domestic enterprises still face many difficulties, which leads to such alarming numbers.
In reality, due to the overall market downturn, many businesses are still struggling, having to "brace themselves" against challenges, such as tax policies, fees, administrative procedures, etc. These issues have been continuously raised by the industries’ associations during policy dialogues, economic forums, and even in legal feedback documents.
The Vietnam Chamber of Commerce and Industry (VCCI) recently submitted comments to the Ministry of Finance on the amended Law on Corporate Income Tax. Specifically, Point m, Clause 2, Article 9 of this draft law, adds a provision that disallows deductions for expenses that “do not meet the conditions or content requirements as per specialised laws” or “expenses not corresponding to taxable revenue”.
According to VCCI, many businesses have expressed confusion about the reasoning behind this provision. They worry that it may lead tax authorities to disallow many legitimate business expenses, which would be unreasonable and could negatively impact their investment motivation.
The government consistently maintains a stance of supporting businesses and will undoubtedly continue to implement supportive policies. However, the urgent issue now is how to build and maintain the businesses’ confidence so that they feel secure and continue to invest, boost production and activities, and reduce the number of companies exiting the market.
Therefore, whether the "health" of domestic businesses will improve in the near future, or whether they will reluctantly exit the market when facing difficulties, depends on more proactive efforts from relevant authorities in policy planning, development, and implementation.
As the "backbone" of the economy, the quality and efficiency of businesses’ operations significantly impact the mobilisation of social resources, economic growth, state budget revenue, job creation, and social welfare. Therefore, only when the government is determined to help businesses overcome difficulties and "retain" them in the market can the economy truly recover and make breakthroughs towards sustainable development.
