On September 11, 2020, the Government of Vietnam issued Resolution 129/NQ-CP 2020 regarding the regular meeting of the Government of Vietnam in August 2020. Important policies to support enterprises affected by COVID-19 were a significant topic mentioned in this Resolution.
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Vietnam: Important policies to support enterprises affected by COVID-19 (Illustrative image)
In Resolution 129/NQ-CP, the Government of Vietnam acknowledged that our economy also faces many difficulties and is affected by both internal and external risks and challenges. Specifically, In Vietnam,
+ Business operations encounter much hardship, especially transport, aviation, tourism, accommodation and food and beverages.
+ There is high risk of unemployment, insufficient number of jobs and decrease in income.
+ Industrial production index of the first 8 months barely increases;
+ Revenues of some sectors fall as disrupted supply chains have yet to recover and global demand declines sharply.
+ Foreign investment attraction seems to have reached a plateau.
Recognizing these challenges, the Government of Vietnam has proposed methods and specified regulations for the competent authorities to implement these methods to support enterprises for recovering and developing the economy out of the difficult phase caused by COVID-19.
The specific policies are as follows:
1. Extending repayment period for debts to support enterprises in Vietnam
Specifically, the State Bank of Vietnam shall:
+ Continue to implement monetary policies in a flexible and proactive manner and cooperate with fiscal policies and other policies harmoniously to stimulate the economy and control inflation, stabilizing the macroeconomy.
+ Urgently amend Circular 01/2020/TT-NHNN and relevant regulations with an aim to extending repayment period for debts affected by COVID-19 and eligible for restructuring/debt classification retention as appropriate to the pandemic’s progress and in support of citizens and enterprises.
2. Proposing tax and fee policies to support enterprises
The Ministry of Finance shall implement tax and fee policies to support enterprises in Vietnam as follows:
- Continue to review and propose tax and fee policies supporting enterprises facing difficulties due to the pandemic;
- Promote administrative procedures reform to enable citizens and enterprises to pay tax.
3. Accelerating the equitization of state-owned enterprises and divesting state capital from enterprises
To implement this policy, the Ministry of Finance is responsible for urgently proposing the draft Decree amending Decree 126/2017/ND-CP and Decree 32/2018/ND-CP to the Government of Vietnam for consideration and promulgation to accelerate equitization of state-owned enterprises and divestment of state capital in enterprises.
Originating from the initial objective of the equitization of state-owned enterprises and state capital divestment from enterprises, accelerating this process helps enterprises have favorable conditions and environments to freely compete and develop.
4. Supporting enterprises affected by Covid-19 to apply for loans
The Ministry of Finance finalizes amendments to Circular 01/2020/TT-NHNN with the State Bank of Vietnam to promulgate the amendments promptly and provide practical support for enterprises and borrowers affected by the pandemic in accordance with the Prime Minister’s direction.
5. Developing specific action programs and plans to promote trade
The Ministry of Industry and Trade is to coordinate with related Ministries, central authorities, and Provincial People's Committees to develop action programs and plans to promote trade. Specifically:
- Boosting of export to potential markets;
- Stimulating demand for domestic consumption, focusing on development of the domestic market with detailed solutions and policies for domestic tourism, retail, transport, accommodation, food and beverages services, agricultural products, etc.;
+ Prevent smuggling and trade frauds in any shape or form, contributing to protection of domestic consumption and production.
In the context that Vietnam is a developing country with its economy facing numerous obstacles and challenges, the impact of Covid-19 has added many difficulties to the economy. However, the Government of Vietnam has been making continuous efforts to achieve the "dual goals": both recovering and developing the socio-economic landscape to strive for the highest growth rate; and resolutely combating the pandemic. In this effort, the policies supporting enterprises affected by Covid-19 are among the methods to recover and develop the economy because enterprises play a key role, significantly contributing to economic growth.
Thuy Tram
