VACD proposes solutions to support businesses

The Vietnam Association of   Corporate Directors (VACD) held a meeting recently on submitting recommendations to the government on solutions to rescue businesses affected by Covid-19. It focuses on five main issues relating to tax, monetary policy, labor, the government’s role in coordinating resources, and government strategies.

In terms of taxes, VACD proposes reductions on value-added taxes and tax exemptions for specific sectors, as well as an extended deadline for tax payments. It also suggests reevaluating the categorization of expenses and deductibles when determining corporate income tax, such as expenses paid to support personnel, costs for Covid-19 prevention and control, costs for maintaining production and business, and costs incurred when operations are stopped.

Regarding monetary policies, it proposes a reduction of 50 per cent on banking fees and interest rates on medium and long-term loans. It also proposes the government allow businesses to issue corporate bonds and also extend payment deadlines on existing loans.

In labor, it recommends that the government regularly update localities on the situation so that businesses can access government support. Such support should be available for all small and medium-sized enterprises (SMEs), family businesses, and individuals. Compulsory insurance and union fees should be waived during this period and reduced during the recovery period. Payment deadlines for insurance for employees should also be extended.

VACD also suggested that the government act as a resources coordinator, for example by working with the electricity sector to reduce electricity bills or by approving appropriate fee reductions on essential products and services provided by State-owned enterprises (SOEs). The government should also make an inventory of existing funds to support businesses and workers.
In terms of long-term government strategies, VACD believes that the government should actively consult with experts in many fields to develop strategic scenarios for disease prevention, natural disasters, and long-term economic development. It also recommends that the government organize a means for receiving comments, initiatives, and recommendations from the community, to help it identify timely directions.