Gov’t okays bailout package for enterprises
By Ngoc Lan - The Saigon Times Daily
HANOI – The Government has approved a bailout package worth an estimated VND29 trillion, or some US$1.4 billion, suggested by the Ministry of Finance in a bid to rescue the struggling enterprises.
Relevant agencies are asked to survey and collect the exact figures of how many companies have suspended production, scaled down business and gone bust, said Vu Duc Dam, chairman of the Government Office.
The greatest problems for enterprises are now outlets for their products and difficult access to bank loans due to high lending rates, he said at the Government’s press conference last Friday.
After the conference, the Government will issue a resolution aimed to help remove the difficulties for local enterprises operating in all business fields.
In particular, flexible monetary policy will be adopted, with deposit and lending rates promptly pulled down. Preferential tax policies, such as tax reduction and tax payment extension, will also be carried out.
Giving further explanation, deputy finance minister Vu Thi Mai said the bailout package worth VND29 trillion will stick to five principles. They are: preventing a return of inflation, promoting production and business; timely supporting those actually in need of help; ensuring the State budget balance to create liquidity for enterprises; coordinating with monetary policy to cut input costs for enterprises; and adhering to economic and corporate restructuring.
Enterprises active in the fields of textile-garment, leather-footwear, electronics, property, engineering, sea transport, cement and steel are those facing the most problems at present.
The Government will submit a specific solution package to the National Assembly on May 21 for endorsement.
Specifically, a 30% corporate tax cut will be given to small and medium firms, excluding financial, insurance and lottery companies, together with producers of items imposed with special consumption tax.
All enterprises will enjoy a six-month extension for payment of April, May and June value-added tax.
Trading and service companies will receive a 50% land rent reduction. Manufacturing enterprises have previously enjoyed tax cuts under the Government Decree 121.
The Government will boost capital allocation for basic construction, provide an additional VND1 trillion for dykes and canals, and allow partial disbursement of the budget for public procurement to consume the huge inventory of enterprises.
The solution package will reduce the State budget revenue by some VND9 trillion, said deputy minister Mai. However, the higher crude oil price this year may help make up for the revenue loss.
The Government will help enterprises sell their products through consumption promotion programs, bringing goods to rural areas, and accelerating disbursement for infrastructure development and social housing programs.
In addition, Chairman Dam said the Government had decided to defer collection of road maintenance fee in six months, meaning the fee collection will start in early 2013 instead of June 1. Collection of personal vehicle restriction fee and downtown entrance fee is delayed indefinitely.