An automotive assembly factory of the Hyundai Thanh Cong Vietnam company (Photo: VNA)

Speaking at a conference in HCM City on May 20 he said the Government’s 300 trillion VND (12.9 billion USD) credit package at low interest rates for affected businesses, extending the payment deadline for 180 trillion VND (7.7 billion USD) 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 700 trillion VND (29.8 billion USD) 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 percent 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 Vietnam 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

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