Promoting enterprises to set up science and technology funds

Production in Dong Nai Rubber Corporation, a unit that has established the Science and Technology Fund

High expectations but low outcomes

This policy has existed for many years and in 2016, the Minister of Science and Technology and the Minister of Finance issued Joint Circular No. 12/2016 guiding the spending and management of the Science and Technology Development Fund of enterprises.

According to this Circular, every year the State enterprises are required to set aside from 3 to 10% of pre-tax income to form a fund, and non-state enterprises themselves decide the specific deduction rate, but the maximum amount is not more than 10% of income before tax. The Science and Technology Development Fund is used to invest in strengthening the potential of science and technology for enterprises, industries and fields of production and business, contributing to improving efficiency and competitiveness. The fund is also spent to equip material and technical foundations; purchase of machinery and equipment together with more advanced technology transfer objects. This is considered an important policy to promote research and development of science and technology in enterprises.

Although the high expectation, in reality, this policy has not brought about the expected effect. For the whole country, in the period 2011-2019, the number of enterprises that have set up the Fund is 662, the amount of deduction is VND21.95 trillion. If compared with the total number of enterprises operating across the country at that time, which was more than 780,000, the rate of enterprises setting aside funds was very modest, only 0.085%. Similarly, in Dong Nai, according to statistics of the Department of Science and Technology, there have been only 3 enterprises in the province that have established funds. Specifically, 2 State-owned enterprises which are Dong Nai Rubber Corporation, Industrial Zones Development Corporation (SONADEZI) and one enterprise with 10% foreign investment capital named OPV Pharmaceutical Joint Stock Company. For private enterprises, there is no unit to set up the fund like this. The above modest number shows that many businesses have not yet realized clearly the benefits and importance of the Science and Technology Development Fund for the development of enterprises, but this problem has its reasons.

Find motivating solutions

 There are many obstacles that delay the establishment and use of the Science and Technology Development Fund in enterprises. According to experts and the business community, it is at the stage of implementation procedures and related regulations. In fact, many businesses do not know how to comply with regulations and procedures for spending and expenditure control, etc. although many related legal documents have been issued. In order to enjoy the incentives of this policy, enterprises must be bound by complicated procedures for spending the funds and the contents that are allowed to spend funds. Although enterprises want to spend the fund, they must make a dossier, set up a council, and appraise the feasibility of the project from the beginning to the end. This process is very complicated and difficult while production and business need less latency and more transparency.

According to the assessment of the Department of Science and Technology, through statistics, the funding source for science and technology research in the province is mainly based on the State budget. For this fund, the interest of enterprises is not much. The setting up of the fund is an optional regulation, mainly as an incentive, so businesses are not very interested in. At a seminar to discuss solutions to develop science and technology in Dong Nai until 2030, with orientation to 2045 held on May 18, Director of the Department of Science and Technology Lai The Thong said that very few enterprises setting up the Science-Technology Development Fund is a matter of concern. Therefore, it is necessary to research solutions to propagate and guide the business community in a reasonable manner. At the same time, it is necessary to have policies so that enterprises can realize practical benefits, thereby promoting enterprises to respond.

For this issue, at the beginning of 2022, the Ministry of Science and Technology also organized to collect opinions on the draft circular amending and supplementing Joint Circular No. 12 above in order to find more suitable solutions.

Phan Anh