Vietnam Young Entrepreneurs Association (VYEA) proposed 5 groups of solutions to "save" enterprises

Enterprise health is now counted by days but not by months anymore. Therefore, the most practical solution is reducing or extending debts that must be quickly implemented immediately to save enterprises.

 In real estate, the President of the Vietnam Young Entrepreneurs Association emphasized that the Government needed to increase public investment more than ever to stimulate demand for the economy during recession. The Government should command ministries of industries to complete the legal framework for tourism real estate. Currently, banks are very concerned about the legality of this type of real estate so there is no legal basic for further lending. 

In addition, with the current above-mentioned urgent situation, in order to save enterprises from the risk of serial bankruptcy, minimize the severe impact of the Covid-19 pandemic on the economy as well as to be ready for the next recovery phase. During the crisis, the Vietnam Young Entrepreneurs Association proposed to the Prime Minister 5 groups of immediate solutions.

Taxes and fees

Tax agencies are proposed to postpone, reduce or exempt some types of taxes as well as to extend tax fillings deadlines, depending on the extent of impact of each field or industry. For taxes and fees that have been instructed on exemption, reduction and postponement, local tax departments are proposed to provide detailed, specific and timely guidelines to enterprises.

For land rental fees under the local authorization, it is proposed to consider and reduction or exemption on land rental fees for those whose businesses being affected in 2020.

Credit

Currently, the Prime Minister's Directive No. 11/CT-TTg, along with many decrees and policies of ministries of industries, has been supporting enterprises in the crisis and pandemic very actively and practically.

However, the implementation is in the one-way direction that means after listening to and reviewing the statistical reports, it was immediately selected the most heavily affected industries such as aviation and tourism to apply reduction on interest rates and rescheduling debts. Later, there are other industries facing difficulties, they will continue to support.

However, these selected industries have not received support as in policies and particularly it is the VND 250,000 billion credit package that the Prime Minister has asked the banking industry to prepare.

The Vietnam Young Entrepreneurs Association also proposed the Prime Minister and relevant ministries, departments and authorities to consider the opposite direction, that means they firstly need to review all industries being affected and in need of support then the unaffected industries including food (noodles) and medical equipment (masks, antibacterial hand sanitizers), etc.

  After eliminating the industries that are not affected by the epidemic, solutions to support the most affected ones should be implemented urgently and immediately such as tax exemption and extending tax fillings deadlines until the end of 2020, reducing interest rates to 5% or even zero, extending bank loans, suspending insurance premiums until the end of the year. 

Those industries suffering less can be reduced bank loan interest by 1-2% and rescheduled bank payments without being transferred to another group for approval of new borrowing.

The solutions need to be clear, specific, targeting the objects and suitable potential so that enterprises do not feel vague. Enterprises only need to send documents to the tax department and the bank stating the reason to be immediately resolved. If these schemes worked well, it will limit the "ask - give" mechanism.

Interest rate

The State Bank had a policy of reducing interest rates, however, the implementation depends on banks and branches because this is a conflict of benefits as the bank is also an enterprise.

The reduction of interest rates needs to be divided by industry, which need to be re-evaluated. For instance, aviation, tourism have been suffering severe damage and in need to have immediate approval for reduction in interest. For industries with less damage, the reduction applied should be from 1% to 2%.

Currently, there are many enterprises sending applications for support and the problem is how to approve? Although the Prime Minister has said that they would limit " ask - give" mechanism, without radical solutions, there will certainly be inadequacies. An enterprise that submits a loan application to a close bank has a better chance of getting approval than other enterprises.

Therefore, it is necessary to specify the policy from the State Bank to have solutions in lowering the basic interest rate as well as to have mechanisms to compensate banks or expand credit growth so that banks can source to recoup the deduction amounts granted for enterprises, etc. Moreover, it is necessary to have administrative guidelines such as which industries will be waive interest or how many % of deduction interest.

In addition, banks need to define how many % to lend to small and medium enterprises and under which conditions, etc. If it is clear and transparent like that, small and medium enterprises can have the opportunity to access support.

Enterprise health is now counted by days but not by months anymore. Therefore, the most practical solution is reducing or extending debts that must be quickly implemented immediately to save enterprises.

Social insurance, salary

Vietnam Social Insurance and local social insurance agencies are proposed to consider exemption, reduction and extension of time of paying insurance premiums for enterprises as well as to issue guidelines to pay workers in case of quarantine due to disease as soon as possible.

In addition to continuously direct support for enterprises, it is very necessary for the Government to support workers. This will help enterprises retain labor resources indirectly when workers still have enough livelihood in this period. Enterprises also partially release the burden of agreement and care for workers. One of the ways the Government provides support to employees is through the Social Insurance Fund.

It is known that at present, the burden has been relying on the Social Insurance Fund, but if the public budget is increased to support the fund, the budget will reach the workers effectively. An increase in public budget is necessary in the current situation. We should accept to continue to "borrow from the future" more to overcome current difficulties. 

In addition, increasing the public budget to support workers who do not have social insurance under the temporary extended "poverty reduction" policies. All should aim to ensure the general income level in accordance with the minimum wage level of the workers. Possibly, we could invite sponsorship from social organizations to enhance the spirit of solidarity, the national moral tradition of “the intact leaves protect tattered ones” to help society overcome the pandemic.

Import and export procedures

According to Decision No. 1810/QD-TCHQ 2018, the process of checking, consulting and defining customs valuation for exports and imports during customs clearance, imported goods are requested for price consultation.

Many members of the Vietnam Young Entrepreneurs Association are regular importers. Currently, due to the widespread affection of the Covid-19 pandemic, the imports price of goods fluctuates continuously with unstable amplitude, the actual import price will be lower than the price in accordance with the customs documents in most types of goods.

When complying with this regulation, enterprises will decide to reduce imports of goods. The balance of supply and demand will therefore be deficit and seriously affecting not only the enterprises but also the economy in general. Therefore, customs authorities should update market prices more frequently and flexibly to request appropriate price consultations or eliminate price consultations for imported goods at this time.

Source: CafeF (Credit to Nhip Song Kinh Te)