More highly practical support policies benefit businesses affected by COVID-19
Many highly practical support policies have been released by national and municipal/provincial governments so as to help Vietnamese businesses overcome coronavirus-stricken difficulties and challenges. This year, the continuous implementation of effective support solutions and policies is what domestic enterprises, including those from Da Nang, expect most in the hope of ‘keeping their heads above water’ in challenging times, and promoting their production and business activities.
Many highly practical support policies have been released by national and municipal/provincial governments so as to help businesses nationwide overcome coronavirus-stricken difficulties and challenges. Here is the inside of the Da Nang Rubber Company. |
In 2020, 7,436 businesses across Da Nang were eligible for the extension of corporate tax totalling 790.5 billion VND. Likewise, 27 others enjoyed the reduction of land rental charges valued at 20.9 billion VND in total.
In addition, about 2,484 family-run businesses affected by the pandemic received financial support from Da Nang government.
In addition to the lowering of lending interest rates, the expansion of loan packages by domestic commercial banks in terms of both sizes and terms, really enable Vietnamese businesses to secure an easier access to preferential credits enhance their production and business activities.
Since beginning of 2020, the State Bank of Viet Nam (SBV) has cut the benchmark interest rates thrice with a total reduction of 1.5 -2% per annum in a bid to facilitate credit institutions across Viet Nam to access more affordable capital from the SBV, hereby enabling them to improve liquidity and keep market interest rates stable.
The refinancing interest rate has been cut to 4% from 6% per annum, while the rediscount interest rate has dropped to 2.5% from 4% per annum.
The overnight electronic interbank rate and rate of loans to offset capital shortage in clearance between the SBV and credit institutions has dipped to 5% from 7% per annum.
In another supportive move, banks will have to set aside money for potentially unrecoverable COVID-19 affected loans from this year, according to an amended circular drafted by SBV.
The amended circular aims to support businesses and people with loans, creating conditions for Vietnamese businesses to recover quickly. The provision ratio will fit the financial strength of credit institutions.
The ratio of the provisions is drafted to gradually increase, from 30 percent of COVID-19 affected loans by the end of 2021 to 60 percent by the end of 2022, and 100 percent by the end of 2023.
On 28 June, 2020, Viet Nam's national government issued Decree No. 70/2020/ND-CP regulating the registration fee for domestically manufactured and assembled automobiles until 31 December, 2020.
Accordingly, the registration fee for domestically manufactured and assembled cars is equal to 50% of the rate specified in Decree No. 20/2019/ND-CP dated 21 February, 2020 on registration fees.
Registration fee is a collection directly paid to consumers, paid by businesses on behalf of the business, so this policy directly supports car buyers, the reduction is in fact very significant.
Chairman of the Da Nang Road Freight Transport Association To Van Hiep hailed the aforementioned decree for benefiting the domestic automobile market.
Businesses want to enjoy more support policies in the future. In the photo are workers at the Lien Chieu District-Binh Vinh Joint Stock Company. |
This year is also witnessing the implementation of more support policies exclusively for businesses nationwide.
In particular, the Ministry of Finance has issued Circular No 112/2020/TT-BTC on regulating collection rates of fees or charges to support and address difficulties in production, business activities and to ensure social security in response to COVID-19.
Accordingly, from 1 January , 2021 to the end of 30 June , 2021, a total of 29 fees and charges will be reduced by 50 – 100%.
Among fees and charges applying the extended reduction period, there is no car registration fee, meaning the reduction of the car registration fee will end on 31 December, 2020.
From 1 July 2021 onwards, the rates of fees and charges specified in the above schedule shall comply with the initial circulars.
Chairman of the Da Nang Association of Small and Medium-sized Enterprises Pham Bac Binh hoped that Vietnamese national and Da Nang governments would facilitate domestic businesses to access credit packages, especially loans offered at preferential interest rates.
At the same time, it is also necessary to diversify capital mobilisation channels in favour of supporting businesses stricken by the COVID-19 crisis.
By MAI QUE- Translated by A.T