CSO Annual Conference: Partnership for sustainable development

On August 22nd 2017, in Ha Noi, Vietnam Union of Science and Technology Associations, in collaboration with NGO Information Center (NGO-IC ), Institute for Community Health Development (LIGHT), Centre for Sustainable Rural Development (SRD) organized “Annual Conference on Civil Society Organizations: Co-operation towards sustainable development”.

The conference aims to increase CSOs’ participation, affirm their roles, positions and voices in social life as well as to maximize their capacity and efficiency. This is also a chance to increase the sharing of experiences and lessons from CSOs, Authorities and Partners with the purpose of addressing difficulties, obstacles and utilizing opportunities, resources for sustainable development and efficient contribution to the country.

Civil Society Organizations (CSOs) are defined as organizations that are voluntarily established by citizens and do not belong to the organizational system of machinery of the state. These organizations are organized and operate based on the principle of voluntarism, democracy and financial autonomy. Moreover, they act towards development purpose instead of profit purpose and have to be bear legal responsibility for their own acts.

Referring to the development context of CSOs in Viet Nam, M.S. Trinh Tien Dung – Former Head of National Administration Department/ Director Assistant of UNDP Viet Nam clarified: “Viet Nam has just reached the lowest level of MICs but the growth momentum has declined as ODA experienced a deep, fast decrease and is likely to exhaust. Besides, FDI no longer contributes much to the development; Natural resources are becoming more and more depleted therefore exploitation will have many social and environmental implications. Furthermore, the knowledge economy has great prospects for development in the long run but there are many hurdles ahead … “

At the conference, M.S. Bui Kim Tuyen – acting Head of Department for Consultancy and Judgement of VUSTA highlighted the reality of VNGOs under VUSTA. The main areas of activity of Science and Technology organizations include health care, education and training, environmental protection, poverty reduction, rural agriculture, community development, Policy advocacy and gender equality.

In terms of advantages, the establishment of non-public science and technology organizations has been facilitated by legal documents. Moreover, many Science and Technology organizations have high-qualified, enthusiastic, experienced scientists as their managerial staff – which is advantageous for scientific research, the application and transfer of technology, etc.
However, Science & Technology Organizations have to face some tax difficulties, namely: There is no clear distinction between types of enterprises and Science & Technology Organizations operating based on non-profit purpose; VAT refund procedures under preferential policies are very complex and difficult to follow. In addition, difficulties involving the delay in aids approval cost organizations which receive these aids a lot of time implementing short term projects therefore make state budget for science and technology less accessible to them. Moreover, there is a lack of policies supporting NGOs to have access to capital and equipment resources for conducting research and technology application purpose.

Regarding tax difficulties, M.S. Nguyen Phuong Linh, Director of Research Center for Management and Sustainable Development also emphasized: “State resources for CSOs, although regulated by State budget law, are only available to specific organizations, associations, unions; Indirect support (tax incentives for donor enterprises , tax incentives for social welfare organizations) have not yet been specified and have not been implemented in reality; The direct tax exemption for CSOs’ activities in Viet Nam is not directly regulated by legal documents … “

In deeper discussion into CSOs’ financial situation, M.S. Nguyen Phuong Linh added: “CSOs, especially NGOs rely heavily on foreign funding while the main budget of Unions come from state resources. Government funding are mainly for Social oriented organizations and specific Unions (2015 = 14,000 billion VNĐ (VERN, 2016)… Other Associations are able to access the state budget (both directly and indirectly) but the rate is not high. Most of the organizations have not participated in public service tenders (77%, n = 88). 54.6% of the organizations receiving government funding are from the North while this figure is 36.4% in the Center and 9.1% in the South.

Stating about financial mobilization at the conference, M.S. Nguyen Phuong Linh emphasized that CSOs need to diversify resources by mobilizing from domestic resources, especially from enterprises and individuals because of their great potentials. This is an evitable trend for CSOs’ existence and sustainable development. However, mobilization from individuals and enterprises has not been encouraged. In particular, tax regulations for non-profit activities are not clear and could hardly become motivations for individuals and enterprises to provide support for CSOs.

As a result, the State and authorities need to establish more specific and clearer preferential policies, especially those involving taxation for contributions from individuals and enterprises for CSOs. There should be appropriate tax policies for specific circumstances. In particular, there should be tax deduction and tax refund policy for non-profit activities – especially emergency relief and humanitarian assistance activities so that CSOs could enhance their capacity to mobilize society’s resources. The State should have preferential tax policy for donors providing support for non-profit activities. For example, their funding for non-profit should be included in production cost, etc. The State should also consider taxing 1% on contributions from enterprises as a reference.

CSOs need to set up their own mission-based organizational development strategy and this strategy should be regularly updated and implemented in reality with professional monitoring and evaluation. Moreover, the strategy also needs to be appropriate and adapted to national and international trends. In addition, programs/projects/services implemented or supplied by CSOs should have a strong connection with national and international development plants and programs. Besides, CSOs should promote their partnership, enhance their study to promote good practices of transparency and accountability, etc.

M.S Bui. Kim Tuyen also asserted that in order for Science and Technology organizations to function effectively, “there should be synchronized policies on State management and taxation for Science and Technology organizations; the use and receipt of funding of Science and Technology organizations should be under management; Science & Technology organizations should be encouraged to collaborate with enterprises and perform their Social Corporate Responsibilities (CSR)”