Many household businesses in HCM City are reluctant to formally register as businesses despite authorities’ inducements. (Photo: tuoitre.vn)HCM City (VNS/VNA) -More than a year after it rolled out support policies to help householdbusinesses become enterprises, only 3,950 out of 250,000 have done so, the Ho ChiMinh City Department of Taxation has said.
Tran Thi Thanh Phuong, Directorof Phuong Cat Tax Agency, said that tax agencies have offered free taxregistration and tax return filing services to new enterprises and householdbusinesses, under the department’s programme to support new enterprises.
Free counselling was offered inall districts, including outlying districts like Nha Be and Binh Chanh, shesaid.
For new enterprises, registrationand certain annual fees for the first three years are waived under the 2017 Lawon Supporting Small to Medium Businesses.
The city’s authorities haveorganised 250 counselling and encouragement events to raise awareness amongpeople running household businesses.
But only 3,950 have upgradedtheir business status, with many others being reluctant to become enterprisessince it could entail paying higher taxes and social insurance.
Mac Quoc Anh, Deputy Director andGeneral Secretary of the Hanoi Small and Medium Enterprises Association, saidsome of the businesses might also want to remain being household firms since itwould help them conceal their true income.
Nguyen Nam Binh, deputy chief ofthe department, admitted that many of the owners may also not be fully aware ofenterprise-related regulations and procedures such as enterprises registrationand keeping proper records.
Some household firms also findthese regulations too complicated and prefer to stay small so that they do nothave to deal with enterprise responsibilities such as obligations to employeesor implementing regulations on environment, noise reduction or fire fighting.
Nguyen Duc Nghia, head of the HCMCity Taxation Agency Club, said tax procedures are too complicated andenterprises often have to hire service providers, adding that the proceduresneed to be simplified to make them easier for small and new businesses.
Phuong said policies to supportsmall and medium-sized enterprises are not well developed.
According to the department,there are many household businesses that are more than capable of becomingenterprises, including over 420 that employ more than 10 staff, which isillegal according to the current law, 14,800 that use invoices and over 21,000 withmonthly revenues of 50-100 million VND (2,200-4,400 USD).
The city aims to have 1 millionenterprises by 2020.-VNS/VNA
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