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MoLISA proposes second support package for people affected by COVID-19 pandemic

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G7 taxi drivers are among those affected by the COVID-19 pandemic’s impact. –Photo dantri.com.vn

HÀ NỘI – The Ministry of Labour, War Valids and Social Affairs (MoLISA) has proposed a VNĐ18.6 trillion (US$798 million) package for those affected by the COVID-19 pandemic, helping them promote production and maintain employment.

The proposal has been sent to the Ministry of Planning and Investment. The beneficiaries are small and medium enterprises, cooperatives, business households in which small and micro enterprises (under ten employees) are given priority, and workers in rural areas. Production and business units can borrow up to VNĐ2 billion, while employees are entitled to VNĐ100 million.

The interest rate support period is 12 months, applied from September 1, 2020 to September 1, 2021. The loan interest rate is 3.96 per cent per year (equal to 50 per cent of the interest rate for the near poor). Estimated cost is about VNĐ15 trillion.

The ministry also recommended a policy supporting unemployed workers living in difficult circumstances. Beneficiaries of this policy are workers who are renting houses or raising children under six years old. They lost jobs or have had labour contracts suspended.

The three-month support amount is VNĐ1 million per person (household) per month and VNĐ1 million for those raising children under six. This will be applied from September 2020 to December 2020. Estimated cost is about VNĐ3.6 trillion.

If it is approved by the Government, it will be the second social security support package to those affected after the country’s economy was hit by the coronavirus outbreak early this year. The first package worth VNĐ62 trillion, launched in April, is being disbursed with zero-interest loans.

Difficult disbursement

Insiders said that it is necessary to loosen conditions to raise the number of beneficiaries. With the current VNĐ62 trillion support package, the disbursement is difficult for beneficiary groups to access.

Võ Trí Thành, a senior economist at the Central Institute for Economic Management (CIEM) and a member of the National Financial and Monetary Policy Advisory Council, told local media that more than VNĐ17 trillion of the VNĐ62 trillion package disbursed was a low figure.

“I think there is a situation of passing the buck and being afraid of responsibility, delaying the disbursement,” Thành said.

General Director of G7 Taxi Management Joint Stock Company Nguyễn Anh Quân said his company has more than 1,000 drivers who have completed procedures for financial support in accordance with the Prime Minister’s Decision No 15 on supporting those affected by the COVID-19 pandemic, however no cases have been resolved yet.

Quân said the difficulty is that the support policies are dedicated to employees whose working contracts have been postponed, in which employees have taken time off for more than a month from April 1, 2020 to June 30, 2020. However, G7 drivers only took 22 consecutive days off, then went back to work on alternate days.

“The company’s production and business efficiency have been severely affected, reducing drivers’ income. However, the number of days off is not enough for a consecutive month, so these workers are not eligible for support,” Quân said, “As for the second support package, I don’t expect much.”

Economist Lê Đăng Doanh said the second social security support package needs to have a broader coverage, comprehensively covering all groups of affected people because the pandemic has negatively impacted almost all industries and fields. Meanwhile, it is necessary to loosen conditions for beneficiaries.

“As many businesses have not been able to access the first support package, ministries and agencies need to reconsider the reason; whether the policy is really effective or not; if it need to be adjusted and supplemented. The most important thing is that the new policies must be more open, practical and meaningful,” Doanh told nguoiduatin.vn.

Nguyễn Khắc Quốc Bảo, Head of the Finance Faculty under the University of Economics Hồ Chí Minh City said that most of the packages issued were ineffective or very unclear. 

Bảo said businesses can be divided into two types – one is State-owned economic groups and the other is the private sector. In which, State-owned groups have strong financial potential in multiple fields, so they are strong enough to cope with the pandemic.

The most worrying is small and medium enterprises. Most of them do not have financial resources, so they are vulnerable when consumption and the economy’s demand decreases. Therefore, they need to be given priority support and protection. “Besides the support from the State, they must also try themselves.”

“Việt Nam’s post-pandemic policy will be very different from other countries because we had spent a large amount of money compared to the size of the budget and the economy to control and stamp out the pandemic. Successful control over the pandemic will create favourable conditions to restore and reactivate the economy,” Bảo said.

“But on the contrary, it also puts enormous pressure on balancing budgets and securing other fiscal spending tasks. This is the reason why it is necessary to classify the beneficiary groups, in which identifying who is prioritised, which economic sectors and which enterprises need support first,” he added.

According to report by the Ministry of Planning and Investment, the COVID-19 pandemic has negatively impacted the economy, seriously affecting almost all sectors and socio-economic fields. About 17.6 million people have had their income reduced, leading to difficulties in stimulating domestic consumption.

In the first seven months of this year, the unemployment rate increased at the highest rate in the past 10 years, of which unemployment in the working group aged 15-54 accounted for 30.7 per cent of the total. –

Source: https://vietnamnews.vn/economy/771629/molisa-proposes-second-support-package-for-people-affected-by-covid-19-pandemic.html

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Vietnam fifth in global trade connectedness

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Vietnam fifth in global trade connectedness

The Tan Cang – Cai Mep International Port in Ba Ria-Vung Tau, southern Vietnam.Photo by Shutterstock/Hien Phung Thu.


Vietnam ranked fifth globally last year in terms of trade connectedness, up five places from 2017, according to a recent report by logistics giant DHL.

With a score of 83 points, Vietnam ranked behind Singapore (92), the Netherlands (92), Belgium (91) and Malaysia (84).

Most countries and territories in the top 10 saw their ranks drop or remain unchanged. Trade is one of four pillars of the DHL Global Connectedness Index 2020, the others being capital, information and people. These pillars are measured by the quantity of traded goods, the amount of international investment and the number of migrants.

The overall ranking of Vietnam in the global connectedness index was 38 among 169 countries and territories, up one place from 2017. “Vietnam has become a serious competitor to China not only in textiles manufacturing, but also increasingly in high tech products,” the report said.

Shoeib Reza Choudhury, CEO of DHL Express Vietnam, said Vietnam was one of the top destinations of companies seeking to diversify their manufacturing, drawn by the young labor force, trade pacts and social stability.

Moving to Vietnam is most popular among hi-tech forms and garment companies, he added. The DHL Global Connectedness Index is compiled every two years to measure the state of globalization in 169 countries and territories.

Source: https://e.vnexpress.net/news/business/economy/vietnam-fifth-in-global-trade-connectedness-4201922.html

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Businesses complain about new CIT payment regulation

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Under the new regulation, by the end of the third quarter, enterprises have to estimate the amounts of tax of the fourth quarter and pay the amounts.

Some of the Decree 126 provisions effective on December 5 related to the Law on Tax Administration, say that the total amount of corporate income tax (CIT) that enterprises temporarily pay in the first three quarters of the year must not be lower than 75 percent of the CIT amounts they have to pay for the whole year.

Businesses complain about new CIT payment regulation

This means that by the end of the third quarter, enterprises have to estimate the amounts of tax of the fourth quarter and pay the amounts instead of the end of the fourth quarter as previously applied.

Dang Ngoc Minh, deputy general of the General Department of Taxation (GDT), told the press on the sidelines of the dialogue between enterprises and customs and taxation agencies held some days ago, that the state budget has a shortage and the purpose of the budget collection is to get money to pay for state management operations, especially to allocate to provinces that cannot cover expenses.

In other words, the budget collection progress plays a very important role in the operations of many localities.

Asked if GDT has received complaints about the new regulation from enterprises, he said these are just a few enterprises and they don’t represent the whole business community.

The official stressed that the tax collection must be done in reference to the local budget management and the benefits of society.

This means that despite the complaints, GDT is still determined to collect tax as planned.

What will happen if enterprises are fined not because they did not pay tax, but just because they did not anticipate the sharp increase in the amount of tax they would have to pay in Q4?

In replay, GDT said it believes that this may happen but not regularly, because enterprises can foresee their business performance.

But enterprises disagreed with GDT about the uncommon number of cases that saw revenue soaring unexpectedly in Q4.

“GDT always sets estimates on state budget collections every year. Will it dare to affirm that it can collect 75 percent of the total budget collections of the whole year by the end of Q3?” a businessman said. “Will it be fined if it fails to do this?”

The businessman went on to explain that no business dares to set revenue targets quarterly, but they only dare set for the whole year.

“Everyone wants to fulfill yearly business plans, but unexpected things always occur. Businesses were preparing for the year-end sale season, when new Covid-19 infections were discovered in HCM City,” he said.

According to GDT, the Decree 126 will take place on December 5. This means that enterprises, seriously affected by Covid-19, will not be affected by the new regulation this year, because the deadline for temporary tax payment was the last day of October, or Q3.

“Who dares to say he will make profit this Tet sale season? With the regulation, it is still unclear which businesses will take a loss and which will make a profit, but all of them now have to make temporary tax payments,” he said.

When the Decree 20 dated in 2017 on the tax administration applied to enterprises with transactions with related parties facing businesses’ complaints, the Prime Minister has repeatedly requested to amend the decree. It took three years to do this.

The decree covers only 8,000 businesses, 83 percent of which are foreign invested enterprises and 17 percent Vietnamese enterprises.

Meanwhile, the number of businesses to be affected by Decree 126 is much higher and the businesses are from many different economic sectors which face difficulties.

The regulation will have a big impact on enterprises and lead to serious consequences, even if it is amended later.

The director of an enterprise warned that businesses that have been hit hard by Covid-19 will become even worse because of the new regulation on temporary tax payment.

“You don’t have money, but you still have to pay taxes in advance, based on the estimated profit you may make in the future. It is just like taxing dreams,” he commented.

Meanwhile, according to GDT, the Decree 126 will take place on December 5. This means that enterprises, seriously affected by Covid-19, will not be affected by the new regulation this year, because the deadline for temporary tax payment was the last day of October, or Q3.

So, enterprises will only have to make temporary tax payment in accordance with Decree 126 by the end of October 2021. 

Duy Anh

Source: https://vietnamnet.vn/en/feature/businesses-complain-about-new-cit-payment-regulation-694866.html

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Vietnam says Oct. CPI up 2.47 pct on year

Vietnam estimated its consumer price index for October jumped 2.47 percent from a year earlier.

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The General Statistics Office said in a report on Thursday that average inflation in the first ten months of this year rose 3.71 percent over the same period of last year.

October inflation slightly rise 0.09 percent against the previous month and December of 2019, the lowest growing rate since 2016.  

Increased prices in education sector and hike food prices due to floods in central region were the main driver of the month’s inflation.

Core inflation in October increased by 0.07 percent over the previous month and by 1.88 percent over the same period last year.

Average core inflation in the first 10 months of 2020 increased by 2.52 percent over the same period in 2019.

The government’s GDP growth target for this year is below 3 percent.

► Vietnam targets 2021 economic growth at 6 percent

Source: https://e.nhipcaudautu.vn/economy/vietnam-says-oct-cpi-up-247-pct-on-year-3337836/

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