As science, technology and innovation have become an important driving force for sustainable development, Vietnam is endeavoring to remove barriers to investment, research and application.

Implementing scientific research and technological development, however, still faces numerous challenges, requiring robust and coordinated solutions.

Amid the challenges, the National Assembly has passed a resolution on piloting special policies to create breakthroughs in this field.

Obstacles hindering research, innovation

One of the major challenges is that tax incentives and financial support policies are not sufficiently attractive to promote R&D at research institutions, educational facilities, and businesses.

At a conference on developing science, technology, innovation and high-quality human resources to boost economic growth, held in early February, Finance Minister Nguyen Van Thang said the state’s spending on science and technology in 2021-2024 remains modest, around 1.37-1.97 percent, and the figure is expected to reach 2 percent by 2025.

Despite regulations in various laws like the Science and Technology Law, State Budget Law and Public Investment Law, inconsistencies in legal documents are hindering the allocation, distribution, and settlement of project funds.

In particular, the coordination between scientific and technological organizations and businesses is not close enough, thus reducing capital use efficiency. Additionally, there are no suitable incentives for inter-regional and inter-disciplinary scientists and tasks.

Chair of the Vietnam Academy of Social Sciences Phan Chi Hieu emphasized that refining the legal framework is the first and most critical solution.

The existing problems in investment, finance, taxation, intellectual property, data sharing, and human resource training are impeding innovation. Thus, related regulations must be revised to bring the Politburo’s Resolution 57 and the Government’s Resolution 03 into effect.

Samsung Vietnam R&D Center Director Suk Ji-won said that in order to attract and retain foreign experts, Vietnam needs to offer comprehensive support policies on visas, taxes, housing, healthcare, and education for their families.

Similar policies should also apply to outstanding domestic talents and experts dispatched to Vietnam by businesses.

Tax cuts and funding allocation to spur innovation

To address these challenges, the National Assembly has passed a resolution piloting special policies and mechanisms to create breakthroughs in science, technology, innovation, and digital transformation.

Two key pilot policies include tax incentives and funding allocation for state-budgeted science and technology tasks.

Regarding tax policy, the resolution permits investments and sponsorships from enterprises for scientific, technological, and innovative activities to be included as deductible expenses when determining taxable income.

This is a significant step, encouraging businesses to invest in R&D without worrying about increased tax burdens.

Additionally, income from salaries, wages, and other earnings from state-budgeted science and technology tasks will be exempt from personal income tax.

Alongside tax incentives, a funding allocation policy for implementing state-budgeted science and technology tasks will be applied. Research organizations can autonomously and responsibly use funds when necessary to hire experts, organize seminars, purchase materials, conduct surveys, and collect data.

The state will prioritize budgeting science and technology tasks through science and technology funds.

Budget estimates will also be adjusted, with provisions for increased funding due to policy changes, related regimes or inflation.

These policy innovations not only resolve practical obstacles but also create new momentum for the innovation ecosystem.

When businesses have a slight tax burden and scientists feel secure with their income, and research institutions have stable resources, the quality and resources devoted to scientific and technological research are expected to rise.

In a recent discussion, when addressing challenges related to science and technology development policies, Associate Professor Dr Nguyen Xuan Hoai, Director of the Vietnam Institute of Artificial Intelligence, mentioned infrastructure-related issues.

"The cost of renting infrastructure is huge. Many state-owned centers are invested in building AI infrastructure, but cannot rent it out or even have no money to pay for electricity due to mechanism problems," Hoai cited.

One of the key highlights of the Politburo’s Resolution 57 is that Vietnam will accept risks in scientific research and technological development. 

Accordingly, organizations and individuals engaged in scientific research and technological development will be exempt from civil liability in cases where damage is caused to the state. 

Organizations leading state-budget-funded science and technology tasks which fully comply with research regulations, processes, and proposal content but fail to achieve expected results will not have to repay the funds already used.

Trong Dat