Policymakers expect more large-scale support packages to aid economic recovery

Committees and bodies under the National Assembly (NA) will discuss fiscal and monetary policies with government agencies to come up with larger-scale support packages to better aid Vietnam’s economic recovery.

NA Chairman Vuong Dinh Hue gave the remarks in a meeting with the local business community on October 7, noting addressing difficulties for enterprises and pushing for economic growth remain priorities of the State.

Chairman of the National Assembly Vuong Dinh Hue at the meeting. Photo: quochoi.vn

“Large support packages are required to contribute better to the economic recovery process,” Hue said.

At the meeting, Chairman of the Vietnam Chamber of Commerce and Industry (VCCI) Pham Tan Cong said the combined scale of support programs in Vietnam is estimated at 2.2% of the GDP, quite low compared to those in neighboring countries, such as Thailand (15.6% GDP), Malaysia (8.8% GDP), or Indonesia (5.4% GDP).

Cong suggested the NA and the Government consider subsidizing interest rates with a margin of 3-5% per annum for loans of enterprises, especially small and medium ones operating in fields of tourism, aviation, transportation, and education.

“Given the current dire situation of businesses, we call for the Government’s consideration to draft more substantial support packages for the business community,” said Cong.

In this regard, NA Chairman Hue stressed the current difficulties are only temporary and expressed his belief that the businesses and people would overcome the hardship and return to growth.

“This is the time to test the resilience of the local businesses,” Hue said, urging enterprises not to concede to the situation.

Hue called for the VCCI as a representative of the business community to provide more suggestions on an overall plan for business development and subsequent economic recovery.

Since 2020, the Government and the NA have been working on solutions to support businesses and workers affected by the pandemic.

This year, the Government has issued resolution No.68 providing financial support worth VND26 trillion ($1.14 billion) for workers and businesses, and resolution No.52 extending payment of land rental fees and taxes worth VND115 trillion ($5 billion); banks have committed to forgoing VND20.3 trillion ($891.4 million) by lowering interest rates for customers.

The NA Standing Committee in late September issued a resolution giving the Government’s authorization to earmark VND30 trillion ($1.3 billion) from the unemployment insurance fund to support businesses and workers.

The Government is in the process of proposing the NA Standing Committee a resolution on waiving and cutting taxes worth VND21 trillion ($922 million) for businesses and workers.

Production at Meiko Vietnam in Thach That Industrial Park. Photo: Le Nam

Substantial support to help businesses survive

Such measures are seen as vital for enterprises to recover, chairman of Ho Chi Minh City’s Business Association Chu Tien Dung said, adding that after four months of coping with the Covid-19 outbreak, the majority of businesses in the city are now on the brink of collapse.

“It is clear that many may not survive when the economic activities return to normal as they would face disrupted supply chains and hiking input materials,” and  “what they need are favorable policies to operate,” Dung pointed out.

Dung suggested the Government inject more capital for enterprises, along with extending the payment deadline of taxes and fees by two years, instead of in 2021.

“We should consider such an amount as a public loan for enterprises and they should make a commitment to repay it in future,” Dung added.

Chairman of Geleximco Vu Van Tien said Government’s policies should take into consideration long-term vision with higher predictability.

Meanwhile, Chairwoman of the Board of Long An International Port Pham Thi Bich Hue urged localities to refrain from making different interpretations of the laws, which are causing tremendous difficulties for enterprises.

Hue cited an example of the regulation on the warehouse, which is considered by certain provinces/cities as housing development and allow construction density of 50%, but others put warehouse into the category of industrial parks, in turn applying construction density of 60%.

Dau Anh Tuan, director of the Legal Department under the VCCI, said overlapping laws and regulations are hindering enterprises' development.

Tuan called for the NA to conduct a comprehensive review of administrative procedures and take steps to ensure greater transparency in the policy-making process.