Government Support for Businesses in Vietnam – Fighting COVID-19

The Vietnamese government has used drastic measures to prevent and control the COVID-19 pandemic at all levels. It has achieved encouraging results. This consistent approach is paying off: In the April 2020 World Economic Outlook, the International Monetary Fund forecasts growth of 2.7 percent. The rating agency Moody’s expects 2.8 percent growth in 2020.

The government has always supported businesses, helping them to overcome difficulties, stabilise and restore production. The package of government support designed to stabilise the economy includes:

1. Reduction of 10% in the retail price of electricity for the manufacturing and business sectors

The retail price of electricity for the manufacturing and business sectors will be discounted by 10% during peak, normal and off-peak hours, as specified in Decision 648 / QD-BCT dated 20 March 2019. Tourist accommodation establishments will also be able to pay the same retail electricity price as manufacturing industries.

2. Financial support

The Vietnamese Prime Minister Nguyen Xuan Phuc issued a directive to the State Bank of Vietnam to instruct credit institutions to meet capital needs for production and accelerate administrative procedures such as shortening processing time for loan applications and reducing fees, interest rates, etc. for customers who are in difficulties due to COVID-19 (a package worth approximately VND 250 trillion).

We can advise clients on all tax issues raised by the pandemic and help them explore the opportunities that state support can offer for businesses in Vietnam.

Mai Huong, Board of Directors Assistant, ECOVIS VSBC, Hanoi, Vietnam

3. Tax and rent support

The government issued Decree 41/2020 / ND-CP, extending the time for paying taxes and land rents, which is worth approximately VND 180 trillion. According to the Minister of Finance, about 740,000 businesses, or 98% of companies in operation, would benefit from the land rent and tax payment extension policy. The Ministry of Finance has issued Circular 14/2020/TT-BTC adjusting prices by 10-50% for nine service groups and completely exempting six service groups in the field of securities.

4. Advice for businesses

In terms of tax expenses, businesses should file promptly for exemption and deferral of payment until after business recovery.
Office expenses such as utilities and stationery can be reduced by working online from home.
In addition, businesses should aim to reduce spending on marketing strategies and move gradually into online sales.

In response to this pandemic, ECOVIS VSBC is helping businesses to improve performance, reduce costs and succeed in changing the business environment, for example by providing services related to starting a business, tax consultancy services or especially tax prevention consultancy.

For further information please contact:

Mai Huong, Board of Directors Assistant, ECOVIS VSBC, Hanoi, Vietnam
Email: huong.dothimai@vietsourcing.com