Science and Technology Development Fund Effectively Used for Digital Transformation | Scientific technology
The SDF is a useful resource for the development of science and technology in business and society in general, but the attractiveness of companies contributing or accessing this fund is rather limited. In 2017 in Ho Chi Minh City, 113 companies contributed to this fund to raise about 1.9 trillion VND ($80 million), but only 384 billion VND ($16.1 million) was used .
Statistics from HCMC’s Department of Science and Technology reveal that currently 79 state-owned companies and 45 private companies are contributing to the SDF, raising about VND 4.4 trillion ($185 million), of which only 30.7% has been utilized. .
Therefore, on May 31, 2022, the Ministry of Science and Technology issued Circular No. 05/2022 on guidelines for the use of SDF. The circular provides general guidelines, standards for companies to build, operate and effectively use the SDF.
However, the SDF still has some limitations, resulting in low and inefficient disbursements. For example, some companies contributing to this fund only report to tax authorities but not to HCMC’s Department of Science and Technology in accordance with Circular No. 5 above; others are reluctant to use this fund because they are unfamiliar with the financial settlement procedure when using it, partly due to differing interpretations by the tax authorities.
The representative of HCMC Tax Department, Hoang Xuan Nam, informed that the SDF contribution is a state incentive policy for enterprises to upgrade their technologies. As a result, any company established and operating in Vietnam cannot pay more than 10% of its annual taxable income to the SDF, while state-owned companies must send 3-10% to this fund.
When the demands of scientific and technological activities exceed the existing amount, companies are allowed to advance the fund of subsequent years or declare this cost in expenses when calculating corporate tax in the tax period. On the other hand, when the fund is not exhausted within a year, public companies must return at least 20% of the excess money or 70% of the amount set up to the national, ministerial or local SDF, transfer understood. .
According to Article 35 of the Technology Transfer Law, SDF is used for investing, exchanging capital, receiving reciprocal capital to invest in technology innovation, technology incubation, science and technology startup incubation , commercialization of research results, technological development.
To make better use of the SDF, the Department of Science and Technology of HCMC proposed to focus on digital transformation. In other words, companies can use this money to equip equipment and technological facilities for scientific and technological activities, to develop appropriate technologies for information security and cybersecurity, to research applications of advanced technologies (virtual reality, 4G and 5G mobile network, cloud computing, remote sensing, geographic information system, voice recognition).
It is hoped that in the near future, the SDF will be better exploited to stimulate science and technology activities in HCMC enterprises.