Importing products has an advantage over production organizations, so many businesses develop well, while enterprises manufacturing machines and molds face numerous difficulties because of high import tax rates.
Great attraction from multinational corporations
Ms. Tran Thi Hue – Deputy Director of Northern Investment Promotion Center – said that Vietnam has great attraction for multinational industrial groups thanks to high economic growth (2018, GDP). The whole country is estimated at 6.8%), which is followed by the need to find companies to supply SI products more and more increasing. However, for Vietnamese enterprises, the way to become partners of “big men” is still very difficult.
According to Hue, large corporations when investing in a certain country drag satellite enterprises. These satellites themselves are also big enterprises, so when looking for suppliers, they give very difficult conditions for Vietnamese enterprises in terms of quantity, quality, types …
However, up to now, some Vietnamese enterprises have actively invested, changed technology and approached the group of 2nd and 3rd class enterprises of international industrial groups. “This is a good signal for Vietnam supporting industry enterprises to change technology and think about the global supply chain” – Ms. Hue stressed.
Need help from tax policy
Mr. Do Phuoc Tong – Chairman of Ho Chi Minh City Mechanical and Electrical Enterprise Association. Ho Chi Minh (HAMEE) – said that manufacturing mechanical enterprises, especially small and medium enterprises, have weak resources, have long been under great pressure from tax policy. This is an important bottleneck of the industry.
Specifically, according to Tong, the domestic machine and mold manufacturing industry currently has to pay import tax on materials such as carbon steel for mold making and specific components such as servo motors, control systems … while importing finished products. The tax rate is 0, so the import price of finished products is lower than domestic production. This is a great competitive pressure for domestic manufacturing enterprises.
Mechanical manufacturing enterprises are also difficult to access and enjoy other support policies. For example, TP. Ho Chi Minh City issued Decision 50/2015 / QD-UBND and Decision 15/2017 / QD-UBND to support enterprises to invest in supporting industry. However, in the field of mechanics, only a few businesses dare to invest. Because according to Hamee representative, when participating in stimulus packages to receive the support of the city, businesses also face many difficulties.
In addition, mechanical enterprises are facing difficulties in production premises. Some enterprises are manufacturing in the factory for a long time, they are not suitable for planning so they cannot participate in the stimulus package of the UNND TP. Ho Chi Minh City, which invests in new factories in industrial parks, costs too much to be able to invest in machines and equipment.
Therefore, in order to connect well with foreign enterprises, according to Tong, Vietnam needs supporting enterprises with sufficient resources and determination; must create opportunities and conditions for domestic mechanical enterprises to develop, have internal forces, and be able to invest in meeting the requirements of large enterprises.
According to Tapchicongthuong.vn