Businesses look forward to Government’s direct support
Producing wooden products for export at Duc Thanh Wood Processing Joint Stock Company. Photo: D.T |
Shipping price increased 4-5 times
That is the reflection of businesses to the Ho Chi Minh City National Assembly Delegation. According to businesses, the impact of shipping fees on logistics activities is harming import and export businesses.
According to Chu Tien Dung, Chairman of Ho Chi Minh City Business Association, the price of container shipping increased 4-5 times compared to before Covid-19, raising the price of Vietnamese products abroad, thereby sharply reducing the comparative advantage for exports, as well as increasing input prices for imported goods, causing difficulties in the field of trade, import and export of goods.
In addition, the impact on the logistics industry also has a great impact on the import of production materials, including for the construction and real estate industries. Most products and materials for construction have seen increased prices (especially construction steel prices), making it difficult for units to fulfill their bid commitments in signed contracts, leading to delays in delivery due to renegotiation, or even contract cancellation, penalty for violations.
This contributes to the quiet real estate business and very few new products on the market.
Difficulties are increasing the number of enterprises that dissolved, closed or temporarily suspended, over the number of newly established enterprises.
The dissolved or ceased enterprises are mostly small and micro enterprises, operating in the fields of transport, tourism, or not in the essential industries as prescribed.
Through a survey of enterprises in Ho Chi Minh City, nearly 30% of workers lost their jobs; in which the leather and footwear industry dropped very deeply at 62%; textile and garment industry decreased by 42.6%; the accommodation service industry (hotels) decreased by 37%; food service industry fell by 38%.
According to a statistical report, from the beginning of 2021 to August, Ho Chi Minh City has had 24,000 enterprises leave the market since the beginning of the year, accounting for 28.1% and increasing by 6.6% compared to the same period last year. However, the actual number is much higher because a large number of enterprises have not yet declared.
Tax exemption and reduction instead of extension
The survey results of the Ho Chi Minh City Business Association showed that the proportion of businesses "temporarily shutting down due to the pandemic" with the cash flow to maintain operations "less than a month" accounted for nearly 40% and 17.7% of enterprises that are "maintaining production and business activities"; the percentage of businesses with current cash flow that can help maintain operations from 1 to less than 3 months is around 46%.
According to Ly Kim Chi, Chairwoman of the Food and Foodstuff Association of Ho Chi Minh City, currently, 70-80% of enterprises producing vermicelli, noodles and pho products have started to restore operations, 100% of enterprises in the fruit and vegetable processing group, milk, fresh food such as cattle and poultry come into operation.
In order to have financial resources, find new sources of labor and orders, businesses in this industry proposed the Government to issue temporary guidance of "adapting to Covid-19" in accordance with the specific characteristics of Ho Chi Minh City.
In which, allowing enterprises to be proactive and responsible for the development and implementation of production plans to ensure safety against the pandemic, management agencies only carry out post-inspections.
In particular, there should be support packages directly for businesses through the reduction and exemption of VAT, corporate income, land rent, instead of extending to the end of the year, to help businesses quickly revive production.
Besides, businesses also proposed to support interest rates to increase cash flow for manufacturing enterprises.
Pham Van Viet, Chairman of the Board of Directors of Viet Thang Jean Co., Ltd. said that in the context of the Covid-19 pandemic, cash flow is like oxygen for businesses. However, most of them cannot access interest rate support packages because of strict regulations in the Law on Credit Institutions.
Because businesses must meet four requirements: no bad debt, revenue, profit and secured assets. The Covid-19 pandemic has caused businesses' revenue to decline, negative profits, no collateral. It is forecasted that the operation recovery will take more than two years while the bank's lending conditions remain unchanged.
“Although it is expected that in October 2021, the State Bank and the Ministry of Finance will submit to the National Assembly a support package with an interest rate of 4% per year (about VND3,000 billion) on a total outstanding loan of VND100,000 billion, it is still difficult for businesses to access if not soon promulgate a special mechanism for businesses facing difficulties due to the pandemic," suggested Mr. Pham Van Viet.
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