Ta Hien walking street in Ha Noi.— Photo tienphong.vn
The Government needs to do more to revive the business sector, Dr Tran Hung Son, deputy president of the Institute for Development and Research in Banking Technology under the Viet Nam National University HCM City has said.
Speaking at a conference in HCM City on Wednesday he said the Government’s VND300 trillion (US$12.9 billion) credit package at low interest rates for affected businesses, extending the payment deadline for VND180 trillion (US$7.7 billion) worth of taxes and fees and reducing social insurance and health insurance premiums for employers are not enough.
He quoted a report by the Institute for Development and Research in Banking Technology, a think tank set up by his university, as saying these measures have a limited impact on businesses since they only reduce expenses and do not increase cash flows or revenues.
These cannot save businesses on the verge of shutting down or going bankrupt, he said.
“To save those businesses, real money must be injected.”
The credit package to support those affected by the pandemic could indeed augment working capital for businesses, but many are finding it difficult to access the loans, especially small and medium-sized enterprises, the worst affected, he said.
To improve businesses’ financial situation in the short term the Government should allow them to account for salary payments this year itself instead of the first quarter of next year so that they could get tax refunds earlier, he said.
It should speed up public spending of VND700 trillion ($29.8 billion) it has earmarked for this year, he said.
In the medium term, the Ministry of Finance could consider allowing businesses to transfer this year’s losses to 2018 and 2019 to similarly enable businesses to get tax refunds.
Deputy Minister of Planning and Investment Tran Quoc Phuong said the economic situation is really bad, especially the GDP growth of only 3.82 per cent in the first quarter, the lowest rate in a decade, and certain other macroeconomic indicators.
Businesses are facing great difficulties due to interrupted supply chains, cancelled orders and lack of new ones, he said.
But there is no end in sight yet to the challenges because the pandemic is continuing in a complicated manner without any accurate prognostication of when it would end, he said.
The longer it continues, the direr the economic situation would become, he warned.
It is predicted that 250,000 - 400,000 workers could lose their jobs, depending on the duration and seriousness of the pandemic, he said.
The outbreak has changed the global economy and Viet Nam needs to make careful preparations from here on, including restructure of its economy and development of key projects to foster sustainable economic development, he added. – VNS