Many highly practical policies to support businesses have been timely issued and effectively implemented by the national and municipal/ provincial administration, thereby helping restore production and business activities amidst the impacts of the COVID-19 pandemic.

The Da Nang tax sector’s is instructing businesses to make invoices according to the new regulations on value-added tax reduction. Activities are seen at the one-stop-shop office of the Tax chapter in Cam Le - Hoa Vang area. Photo: M.QUE

Support coming from the national government

On January 30, 2022, the national government issued Resolution No. 11/NQ-CP on the socio-economic recovery and development programme, and implemented Resolution No. 43/2022/QH15 adopted by the National Assembly on financial policies.

The value added tax (VAT) reduction policy for applicable goods and services took effect from February 1, 2022.

In detail, the reduction of VAT to 8% in 2022 (down 2% from the current rate) for business establishments that calculate VAT by the credit method and a drop of 20% for those that calculate VAT according to the percentage method on revenue.

The tax cut is a timely policy that ease the financial strain felt by consumers amid the pandemic.

Of special note, the VAT cut is not applied to goods and services in the fields of telecommunications, information technology, finance and banking, insurance, stock trading, real estate business, metal production and mining industries (except coal), petroleum, chemicals, and commodities and services that are subject to the special consumption tax.

In addition, there is a 2% interest rate subsidy per annum on loans, through the system of commercial banks enterprises, for enterprises, cooperatives and family-run businesses that are able to pay debts and have the ability to recover in certain industries.

Included are aviation, transportation and warehousing, tourism, accommodation, catering, education and training services, agriculture, forestry and fishery, processing and manufacturing industries (including machinery, equipment, drugs, pharmaceutical chemicals, and medicinal herbs), software publishing, computer programming and related operations, information service activities, renovation of old apartments, the building of social housing units and workers’ houses.

Highly-practical supportive schemes adopted by Da Nang government

The Da Nang administration has recently adopted Resolution No. 63/2021/NQ-HDND on offering reductions on infrastructure use fees for enterprises financially affected by COVID-19 to lease or sub-lease land in the Da Nang Hi-Tech Park and industrial parks (IPs).

Enterprises that are eligible for the above-mentioned supportive schemes must be operating ones, excluding those that have ceased operations or are undergoing procedures for dissolution and bankruptcy.

In detail, a 50% reduction of infrastructure use fees in 2021 is set for businesses that lease or sub-lease land in the Da Nang Hi-Tech Parks and IPs in the city.

Supportive funds are arranged in the city’s budget expenditure estimates.

Particularly for enterprises operating in the expanded Hoa Khanh and Lien Chieu IPs, the Sai Gon - Da Nang Investment Corporation offers them a 25% subsidy on the use of infrastructure whilst the remaining 25% is supported by the city budget.

In another supportive scheme, small and medium-sized enterprises are allowed to access loans with a 50% reduction on interest rates from the Da Nang Development Investment Fund to carry out projects in certain aspects prescribed in the Da Nang People's Committee-adopted Decision No. 1568/QD-UBND.

The amount of support is calculated on the total disbursed capital.

The interest rate support period is not more than 24 months from the date of signing the credit contract.

The maximum amount of disbursed capital supported by the maximum interest rate per enterprise is not more than VND10 billion.

Funding for interest rate support comes from the municipal budget and will be included in its annual expenditure estimates.

As assessed by Mr. Pham Bac Binh, Chairman of the Da Nang Association of SMEs, the aforementioned support policies, especially the resolutions issued by the Da Nang People's Council at the end of 2021, satisfy many businesses’ aspirations.

In addition, the national government's policies on economic recovery and flexible adaptation to the COVID-19 pandemic over the past time also offer an opportunity for businesses to speed up the production and business recovery pace.

However, in order for businesses to recover faster, policies need to be put into practice soon, especially assistances in terms of fees, charges and bank loans.

Reporting by MAI QUE – Translating by A.THU