Vietnam News

State needs to activate support package for businesses

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Local enterprises have urged the Government to soon activate support policies to help them overcome difficulties in production and business due to the novel coronavirus (COVID-19) pandemic.

The Government has offered a credit package worth VNĐ285 trillion for businesses due to difficulties caused by COVID-19. The State has also extended payment deadlines for taxes and fees to support businesses, including value added tax, income tax, corporate tax and land rent.

The finance ministry said the total amount of the five-month extension is estimated to be about VNĐ30.1 trillion (US$1.3 billion). 

Those assistance measures are expected to help businesses and ensure social security during the COVID-19 pandemic. However, they have not yet come into effect.

Mặc Quốc Anh, Chairman of Hà Nội Association of Small and Medium Sized Enterprises, said the State should take action to help businesses receive the support as soon as possible.

In addition, the State needs specific solutions to give support to businesses that are experiencing real trouble due to the pandemic. It will avoid businesses that have experienced difficulties due to other reasons, he said.

The Department of Private Economic Development under the Prime Minister’s Advisory Council for Administrative Procedure Reform has released a report on the impact of COVID-19 on production and business activities of enterprises.

This report surveyed 1,200 enterprises in various fields, including agriculture, industry and services. According to the survey, this pandemic has had a great impact on enterprises’ production and business.

If the pandemic lasts for up to six months, 60 per cent of them would lose at lease 50 per cent of their revenue and 29 per cent would lose 20-50 per cent of the revenue. Only 1.8 per cent of the surveyed businesses have not suffered losses in revenue during the pandemic.

Meanwhile, 80 per cent of the surveyed non-State educational facilities (institutions) have had losses of at least 50 per cent, so 90 per cent out of them are at risk of bankruptcy.

If only 1,000 foreign language training centres are closed, they will lose trillions of đồng and 30,000 workers will lose their jobs, including teachers, staff and guards, according to the report.

Most experts believe the support has been issued in a timely manner, but the State should have specific regulations on implementing the support and monitor its implementation to avoid risks for the economy.

Ngô Trí Long, former director of the Ministry of Finance’s Price and Market Research Institute, said the most important thing is to identify firms in real need to enjoy the support measures.

Supporting the wrong firms is likely to be an inefficient and unsustainable investment, leading to poor quality economic growth and risking high inflation after the support package ends, he said.

Vietnam News – March 16, 2020

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