Cutting procedures and input costs to support small businesses

VTV.vn - Reducing the burden of logistics and administrative procedures is the key to helping small businesses overcome difficulties, creating more momentum for sustainable growth in 2025.

Vietnam's logistics costs will account for 16.5% of GDP in 2025, higher than the world average (11.6%).

Cost pressures weigh on small businesses

The end-of-year business season is usually bustling, but for Mr. Pham Minh Dong, General Director of Asia Vietnam Investment Company, it is a time full of pressure. The company specializing in importing flooring and furniture is having its profits eroded by logistics costs.

A 40-foot container from Shanghai (China) to Saigon port only costs 300-400 USD. But transporting a similar container from Ho Chi Minh City to northern ports costs up to 1,000 USD, three times more. "Domestic shipping is more expensive than shipping to Europe and the US," Mr. Dong said.

Mr. Do Tri Tuan, Deputy General Director of Dai Dung Group, said that Vietnam's steel exports reached 1.2 - 1.5 billion USD/year. Despite the great opportunity, logistics costs and defense tariffs from the US market have narrowed profits, making it difficult for businesses to enter the global supply chain.

Statistics show that Vietnam's logistics costs account for 16.5% of GDP, higher than the world average of 11.6% and surpassing many ASEAN countries such as Singapore (8.5%), Malaysia (13%). In agriculture , this rate can even reach 20% of the cost price, making it difficult for businesses to compete.

Vietnam's steel exports only reach 1.2 - 1.5 billion USD/year, less than 1% of the global market.

Vietnam's logistics costs are higher than the world average.

- Vietnam Logistics: 16.5% GDP (world: 11.6%)

- Agriculture: logistics costs account for 20% of cost price

- Steel export: 1.2 - 1.5 billion USD/year, less than 1% of the world

- SMEs: 97% of enterprises, contributing 50% of GDP.

Not only costs, administrative procedures are also a concern for businesses. In 2025, the Ministry of Finance must review up to 928 tax and customs procedures, proposing to cut more than 500 procedures. If fully implemented, compliance costs could decrease from VND75.43 trillion to VND48.82 trillion, saving VND26.61 trillion per year.

If input burdens can be reduced and capital flows and confidence can be unblocked, the private economic sector will develop strongly in the coming time.

More substantive support

What businesses expect most is specific, strong and timely support policies. Many opinions say that the State should focus on "hard" infrastructure such as dry ports, cold storage, logistics centers, while businesses worry about "soft" infrastructure such as technology and management. This approach can help reduce transportation costs by 15-20%, while encouraging businesses to boldly invest and increase added value.

With agricultural exports reaching 50 billion USD per year, just a 10% increase in profit margin would be a huge resource for the economy.

The government is also sending out strong signals. Resolution 66/NQ-CP on cutting administrative procedures is expected to save time and costs while strengthening business confidence. In addition, building steel structure export centers, piloting green logistics and investing in key transport infrastructure are also necessary steps.

In the context of uncertain global growth, Vietnam’s economy cannot rely solely on the FDI sector. The key lies in unleashing the potential of small and medium enterprises, which account for 97% of the total number of enterprises and contribute 50% of GDP. If the input burden can be reduced, capital flows and confidence can be unblocked, the private economic sector can completely become the main driving force, creating more jobs and increasing the competitiveness of Vietnamese goods in the international market.

Source: https://vtv.vn/cat-giam-thu-tuc-chi-phi-dau-vao-ho-tro-doanh-nghiep-nho-100250923160136588.htm