Institutional challenges following organizational restructuring

Under a decision of the Prime Minister, the Lang Son provincial Investment, Trade and Tourism Promotion Center was established by merging three entities: the Investment Promotion and Enterprise Support Center (under the Department of Planning and Investment), the Industrial Promotion and Trade Promotion Center (under the Department of Industry and Trade), and the Tourism Information and Promotion Center (under the Department of Culture, Sports, and Tourism).

The restructuring aimed to streamline operations, reduce administrative layers, optimize budget use, and enhance management efficiency. However, it created regulatory and financial challenges for implementing industrial promotion projects.

A representative from the Department of Industry and Trade explained: “Since the center became operational, several functions have stabilized. Industrial promotion remains complicated due to the lack of a legal basis for budget allocation. Plans exist and demand exists, but implementation is impossible.”

The Ministry of Finance’s Circular No.64/2024/TT-BTC, issued on August 28, 2024, stipulates that units in charge of industrial promotion must submit budget estimates to the Department of Industry and Trade, which consolidates and allocates funding. 

Under the new structure, this process no longer fits. The Industrial Promotion and Trade Promotion Center reports directly to the provincial People’s Committee, while the Department of Industry and Trade retains state management functions but no longer manages affiliated units.

According to Prime Ministerial Decision No.1725/QĐ-TTg (December 29, 2023) and provincial regulations, the promotion center is responsible for implementing programs, while the Department oversees appraisal, inspection, and supervision. Both entities are primary budget units with separate allocations.

This change disrupted the budgeting process. In 2025, the province could not allocate industrial promotion funds to the center, effectively freezing programs, even as many small-scale industrial enterprises required support for machinery, equipment, and trade promotion.

Calls for regulatory adjustment

To address this issue, the provincial People’s Committee requested guidance from the Ministry of Finance in December 2024. In February 2025, the Ministry confirmed that Circular No.64/2024/TT-BTC complies with Decree No.45/2012/NĐ-CP and suggested that Lang Son coordinate with the Ministry of Industry and Trade to propose amendments.

Lang Son proposed adjustments to allow centers under the People’s Committee to directly receive industrial promotion funds, specifically targeting Clause 3, Article 14 of Decree No.45/2012/NĐ-CP. Although Decree No.235/2025/NĐ-CP was issued in August 2025, the provision on budget allocation remained unchanged. The Department holds funds but lacks implementing units, while the promotion center, capable of executing programs, cannot access the budget.

A Department representative noted: “We have personnel, capacity, and plans, but no funding. The Department has the budget but no unit to implement. Many projects are stalled, and businesses lose access to support.”

The provincial Department of Industry and Trade recommended that the Ministry of Industry and Trade advise the government to clarify the two models: the former, where the center is under the Department, and the new, where it reports to the provincial People’s Committee. Without adjustments, industrial promotion activities could be disrupted, affecting rural industrial development and start-up support.

The province also urged the Ministry to revise regulations so all localities, merged or not, can benefit from state industrial promotion policies. It proposed temporary, flexible measures during the transition to prevent resource waste and ensure continuous support for enterprises, craft villages, and rural industrial establishments.