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6 problems that may make costs higher for businesses in 2010
Chairman of the Vietnam Accountancy and Auditing Association Dang Van Thanh has warned that there are six problems likely to increase costs for businesses in 2010.
Thanh, in an interview given to Thoi bao Kinh te Vietnam, said that Vietnam’s economy has enjoyed major achievements in the last 23 years. However, the national economy is still showing a lot of problems: markets have not fully developed while underground markets have developed well and unhealthy competition exists in the national economy.
Business results depend directly on turnover and expenses. In 2010, enterprises will have six factors that may make expenses increase and two factors that may help reduce expenses. As such, the number of factors that badly affect businesses’ operation is triple the number of factors that can help businesses.
However, according to Thanh, though total business expenses may increase, the expenses per unit and production cost per unit may decrease, which means profits may increase.
The six factors that may raise the expenses of enterprises in 2010 depend on the new policies of the State which will take effect in 2010.
Firstly, local authorities have adjusted land frame prices which increase by 20-30 percent in some localities. New policies on compensation for site clearance will certainly affect real estate prices and fixed asset depreciation cost.
Secondly, the State has removed the short term interest rate subsidy program, which will certainly make capital costs increase.
Thirdly, policies on tax incentives and preferential fees applied to many categories of products in 2009 will not be applied in 2010 any more, which will raise production costs higher.
Fourth, a tax on securities investment will be imposed as of January 1, 2010 which will not encourage securities investment
Fifth, minimum salary levels will be applied in 2010. The wage renovation process and the program to raise minimum wages will certainly affect the spending on the labor force.
Finally, the new healthcare insurance policy will mean a new kind of spending for enterprises, especially those with many employees.
Additionally, there are two factors that may help businesses reduce their costs. Under WTO commitments and bilateral economic pacts, Vietnamese exporters will enjoy lower tariffs when going to the markets which have economic agreements with Vietnam
Meanwhile, the Government has affirmed its determination to simplify administrative procedures to help businesses cut down expenses, especially in areas of tax payment, tax declaration, and import-export formalities.
VietNamNet, TBKTVN
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