Hanoi (VNS/VNA) - It is necessary tocomplete a legal framework for business households so as to promote theirdevelopment and contributions to the economy, experts have said.

Business households are estimated to totalaround 5 million and play a significant role in the Vietnamese economy,contributing 30 percent to the country’s gross domestic product (GDP) andcreating 10 million jobs.

As the Government of Vietnam set a target ofhaving 1 million firms by 2020, 1.5 million by 2025 and 2 million by2030, business households are identified as a major force for the country toachieve this goal.

However, there is a lack of legal framework fortheir operation and for promoting their development.

Under the established enterprise law, Vietnamnow has about 700,000 firms while business households are not regulated asenterprises.

Mixed opinions were raised over whether businesshouseholds should be recognised as a type of enterprise and included in the Lawon Enterprise which was being amended. Some said that a separate legalframework should be developed for business households.

Nguyen Thi Cuc, Chairwoman of the Vietnam TaxConsultancy Association, said that business households should not be includedin the regulations of the Law on Enterprise. “A separate legal framework forbusiness households could be a better option to promote their development,” Cucsaid, adding on the other side, policies to encourage business households tochange into enterprise were also required.

Policies should be flexible to allow businesshouseholds to choose the appropriate models for their operation, experts said.

Truong Thanh Duc, director of law firm Basico,said that forcing business households to operate as small or macro-sizedenterprises would sound unreasonable.

Phan Duc Hieu, Deputy Director of the CentralInstitute for Economic Management (CIEM), said that it was important to developa legal framework which could create impetus for the development of thebusiness households.

Hieu cited a survey finding of the VietnamChamber of Commerce and Industry (VCCI) that around 18 percent of existingfirms developed from business households, adding that this was a naturalprocess.

“We should not talk about how to transformbusiness households into enterprises. Instead, it is better to figure out a wayto treat business households fairly with other types of enterprises and givethem a chance for development,” Hieu said.

Hieu said that a draft framework for businesshouseholds would be made public for comments.

According to VCCI Chairman Vu Tien Loc, businesshouseholds in Vietnam had not received adequate attention despite theirsignificant role in the economy.
Loc said that it was critical to remove barriersfor them to develop, adding that business households would be the grounds forthe development of Vietnam’s business community.  

Under a draft resolution by the NationalAssembly which the Ministry of Finance recently made public for comments, theministry proposed tax exemptions for two years after first reporting taxableincome for firms which transform from business households.

This aimed to encourage business households to transforminto enterprises.-VNS/VNA