The strategy was effective and relevant, but the expenses were not feasible.
During the Vietnamese Economic Forum 2026 (held on March 25), Professor Vu Sy Cuong from the Academy of Finance stated that the policy of promoting financial resources for research and development (R&D) is not new in Vietnam. In fact, Decree 35-H-BT of January 28, 1992, already required increased mobilization of financial resources for science and technology. Statistical data shows that total investment in R&D has increased over the years; however, it also indicates that Vietnam allocates an insufficient budget and has never reached the 2% of GDP goal. Specifically, R&D investment in Vietnam represents just over 0.4% of GDP, which is a quarter of the 2% objective and only 20% of global spending.
Furthermore, the government has also implemented a series of regulations to encourage businesses to invest in science and technology. However, measures such as preferential tax rates for companies, import duties, and VAT have not yielded significant results. Statistics show that in Vietnam, business spending on R&D accounts for only 0.2% of GDP, a figure much lower than the 1.7% in China and 3.6% in South Korea.
According to Professor Vu Sy Cuong, R&D spending has increased in all sectors since 2015. “However, due to inflation, this increase is negligible. On the other hand, private sector spending has significantly increased. Therefore, if the government implements appropriate incentives, the resources that companies will dedicate to science and technology will be substantial,” he said.
The problem, according to Professor Cuong, is not strategic, as many solutions have proven to be correct and effective. The difficulty lies in implementing these regulations, as they are very detailed and specific. Therefore, precision and detail are essential in all areas.
For example, in terms of taxation, obtaining a tax exemption for scientific and technological development expenses is not easy because, in practice, this expense is at the top of the income statement. The regulations allow companies to allocate 10% of their pre-tax profit to a scientific and technological development fund and be exempt from corporate income tax. However, investigations show that the percentage of companies with such funds and using them is very low because some, after allocating the funds, do not know how to spend them, and the spending procedures are very complex.
Therefore, this professor suggested a radical overhaul of policies, accompanied by relevant and effective solutions and strategies. All documents and decrees defining these policies must be reviewed so that companies only have to comply with the regulations, simplifying implementation and allowing the entire budget allocated to be dedicated to science, technology, and innovation.
“Reforming tax collection methods to promote R&D in businesses.”
Dr. Do Dieu Huong (Vietnam and World Economics Institute) stated that in the context of growth model transformation, financial policy plays a crucial role as a key macroeconomic regulation instrument of the state. Through tools such as fiscal policy, budget expenditures, public investments, and mechanisms for mobilizing social resources, financial policy can contribute to directing resource allocation, encouraging innovation, promoting the development of new economic sectors, and enhancing economic competitiveness.
International experience shows that countries successfully transforming their growth models implement constructive fiscal policies that favor innovation and actively drive the restructuring of their economy. South Korea is a perfect example. From an economy based on cheap labor and assembly industry, it has transformed into a knowledge economy and high technology.
Therefore, according to Dr. Huong, in the context of growth model transformation, fiscal policies must be designed to ensure the sustainability of budget revenues and create incentives for investment in technology, innovation, and digital transformation.
An important direction of reform is to expand tax incentives for research and development, similar to the R&D tax credits in many developed economies. These mechanisms allow companies to deduct a portion of their research expenses from their taxes, encouraging them to invest more in technological innovation. For Vietnam, Dr. Huong suggested reforming fiscal policy to incentivize companies to invest in R&D, digital transformation, and high-tech industries. Improving the tax incentive system for high-tech companies, innovative startups, and investment projects in renewable energies or clean technologies can contribute to modernizing the economic structure.
Source: https://baophapluat.vn/chinh-sach-nao-de-thuc-day-von-cho-doi-moi-sang-tao.html
