Wednesday, December 11 2019


Policies should help S&T firms

Update: March, 31/2014 - 09:09

Pham Hong Quat, deputy director-general of the National Agency for Technology Entrepreneurship, told Tuoi Tre Cuoi Tuan (Youth Weekly) about the need to remove hurdles for science and tech entrepreneurs.

Currently, many of our science and technology based enterprises belong to the small and medium category and are newly-established. However, many cannot access favourable policies specifically designed for science-technology enterprises. What are your thoughts on this?

Currently, many science and technology (S&T) enterprises are exempt from paying corporate income tax in the first five years. They only pay five per cent business income tax in the nine years following and 10 per cent afterwards.

Additionally, they can enjoy preferable policies in investment credit, stamp duty and land rental. On paper these incentives might sound straight forward, but in reality, not all S&T enterprises can access these benefits.

For example, to benefit from the tax incentive, the enterprise must show that revenues generated from a particular technology comprises 30-70 per cent of total revenue (from first-third year).

Another major hindrance is the difficulty getting land to expand production. According to Government Decree 80 issued in 2007, S&T enterprises are given priority when trying to access land and benefit from low rents. However, in the process of issuing the circular, the Ministry of Natural Resources and Environment didn't sign it, which means it has not been implemented.

Many S&T enterprises say that they also face many problems winning bids for major projects. Do you agree that is because of their limited capabilities or other factors?

The Law on Bidding does not give any priority to S&T enterprises. In other countries, this is very important. Obviously, if you can't win bids for projects, you can't generate jobs, increase revenue and thus don't qualify for tax incentives.

We know that many S&T enterprises want to apply their new technology in thermo-electricity factories, public projects and government-funded projects for low-income earners, but it's very difficult because our S&T enterprises, many which are at the early-stage of development, must compete with big players.

Foreign S&T enterprises might have years and years of experience and know-how, and have well established networks. They also rely on lobbying efforts to win these major projects. Our S&T enterprises must also be more proactive in forming networks.

Is it true it's very difficult to get a certificate to set up a S&T enterprise?

The current regulation requires that you must have a certificate of invention before being allowed to establish a science-technology enterprise. This can delay the development of the S&T business community. For such an exclusive certificate to be issued, you must wait around two or three years.

Farmer Dinh Van Giang in Quang Ninh Province sells his forage processing machinery, which is used to crush food for livestock, to farmers across the country. That is something that can be commercialized. Currently, he has not been able to register a S&T enterprise to receive benefits.

Or look at the case of inventor Pham Hoang Thang in Can Thuo, who is quite famous in the Mekong Delta. He could establish a science-technology firm on his own but obviously this is quite difficult in the current conditions.

In other countries like Finland and Japan, policies encourage and help the people to build their fortunes through science-technology.

Are we doing anything different to promote the S&T sector? Especially in the private sector?

Currently, our national labs mostly serve government-funded projects. However, we hope that within this year, we would start allowing national labs to support private research.

The registration process to establish S&T enterprises will be simpler. Previously, to be recognized as a S&T enterprises, you had to explain the process of incubating and mastering technology. Now, you only need to prove the process of incubating the technology and that you legally own the technology.

The Government will also transfer the rights to the technology to institutes and universities.

Hopefully, this will encourage research institutes and universities to seek out enterprises and link them with the market. These educational institutions can sell their technology and also get new funding for further research.

To make sure that our efforts to develop the S&T business community become effective, we need help from all both the private and public sectors. But more preferable policies also mean that our state budget will be affected.

However, developing S&T enterprises is a long-term goal. Should we act for the short-term or the long-term goal? — VNS

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