Thousands of billions of dong in fund money

To encourage science and technology development activities and innovation in enterprises, the Law on Science and Technology, Decree No. 95/2014/ND-CP of the Government regulating investment and financial mechanisms for science and technology activities, and guiding circulars have provisions on the establishment, management and use of science and technology development funds of enterprises.

However, according to the summary report of the Ministry of Science and Technology on the implementation of the Law on Science and Technology, in the period of 2015-2021, the amount of money and the number of enterprises setting aside the Fund are not much; the use of money from the Fund for S&T activities only reached 60%. Specifically, there are about 220 enterprises setting aside and using the Fund with a total amount of money set aside of about 6,500 billion VND; the amount of funds used is about 3,200 billion VND, of which the amount of funds used from the set aside source in 2022 is about 848 billion VND.

Nguyen Nam Hai, Director of the Department of Planning and Finance (Ministry of Science and Technology), said that in order to remove obstacles for the operation of science and technology development funds in enterprises, the Ministry of Science and Technology has issued Circular No. 05/2022/TT-BKHCN guiding the use of science and technology development funds of enterprises. However, some current regulations on investment and financial mechanisms for this activity are not suitable. The allocation of investment capital is still overlapping, spread out, and not focused on priority areas; regulations on the development of estimates and funding for management of science and technology tasks using the State budget have not met the needs.

Meanwhile, the regulations encouraging the establishment and use of science and technology development funds are not attractive enough, so the number of enterprises establishing funds is not large, and the unused fund balance is large. State management of funds is applied according to the post-audit regime, while the instructions on spending content are still lacking in specificity, which can easily lead to legal risks for enterprises.

In Hanoi, the allocation and use of the science and technology development fund in enterprises is also very limited. According to the report, only 17/26 state-owned enterprises in the city have implemented it, the total amount of fund allocation of enterprises in the period of 2021-2023 is 116.5 billion VND, of which 8.2 billion VND is used (3 enterprises incurred fund expenditures). Enterprises mainly encounter difficulties and concerns about the valid contents to be spent from the fund, the development of regulations and rules within enterprises to serve fund management, and the payment of unused funds to the National Science and Technology Development Fund and the City Science and Technology Development Fund.

Responding to the Hanoi Department of Science and Technology, Hanoi Irrigation Development Investment Company Limited said: The company wants to use the science and technology development fund to implement the project, including investing in purchasing information technology equipment systems, digital technology applications, digital management infrastructure, etc., but does not dare to spend the unit's science and technology development fund. The reason is because it does not know whether the above spending categories are suitable for the fund's spending content.

Also facing difficulties in spending the science and technology development fund, the representative of Hanel Joint Stock Company shared that investing in research and development costs requires large costs and is risky. Therefore, if the enterprise's income is not enough or the fund cannot be allocated enough to invest in research and development, it will be difficult to carry out research and development. In particular, enterprises with state-owned capital will face many difficulties in using business capital to pay for research and development costs, because the management of state capital must be profitable in the first year, while the research and development period can last up to 2-3 years to be successful or even fail.

Soon there will be a solution

To remove the main obstacles in the use of enterprises' science and technology development funds, the Ministry of Science and Technology has issued Circular No. 05/2022/TT-BKHCN guiding the use of enterprises' science and technology development funds and the Ministry of Finance has issued Circular No. 67/2022/TT-BTC guiding tax obligations when setting up and using enterprises' science and technology development funds.

Accordingly, for problems with expenditure content and fund allocation procedures, fund management and use have been adjusted in the direction of expanding expenditure content, specifying more specific fund expenditure items and creating an autonomous mechanism for enterprises.

Director of the Department of Planning and Finance (Ministry of Science and Technology) Nguyen Hai Nam said: in addition to spending according to science and technology tasks, enterprises can use this capital source to support development; spend on technology transfer activities; spend on fund management activities. This has met the expectations of enterprises.

Also according to Mr. Nguyen Nam Hai, according to the provisions of the Law on Science and Technology 2013, enterprises have the right to autonomy and self-responsibility in managing and using the fund for the right purpose of establishing the fund and notify the establishment of the fund to the local science and technology management agency where the enterprise has its headquarters.

Currently, the Ministry of Science and Technology is presiding over and coordinating with relevant ministries, agencies, especially the Ministry of Finance to amend Decree No. 95/2014/ND-CP regulating investment and financial mechanisms for science and technology activities.

Accordingly, the Ministry of Science and Technology plans to propose amendments to a number of points, including regulations on the rate of fund allocation for science and technology development of State-owned enterprises in the direction that: Enterprises can proactively determine the minimum fund allocation rate, but not exceeding 10% of annual taxable income to ensure equality in fund allocation rates between State-owned enterprises and other types of enterprises.

Regarding the upcoming plan, the Ministry of Science and Technology has a plan to amend the Law on Science and Technology in the spirit of maintaining the regulation that State-owned enterprises must set aside funds for their science and technology development but allowing flexibility in deciding the fund setting aside rate as the direction of amending Decree 95.

According to the Ministry of Science and Technology, in reality, the implementation of this fund allocation for state-owned enterprises in the past was not difficult, but the problem was in the implementation and disbursement of the fund. The Ministry has coordinated with relevant ministries to free up this resource, maximizing the effectiveness of the fund in the coming time, specifically amending the Law on Science and Technology.