VCN - A series of strong fiscal policies have been announced in the second economic stimulus package proposed by the Ministry of Planning and Investment (MPI). This package aims to support enterprises and workers in difficulties due to the Covid-19 pandemic.
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Save aviation and travel enterprises
The MPI has proposed researching and developing specific policies to support aviation businesses seriously affected by the Covid-19 pandemic.
Specifically, the Government would guarantee loans to aviation units; and study the mechanism allowing the State Capital Investment Corporation (SCIC) to invest in aviation firms.
In this case, the MPI suggested implementing a specific regulation to ensure separation between the results of this investment activity and the results of general business operations.
This policy, according to the Ministry of Planning and Investment, will support cash flow and liquidity for aviation enterprises and avoid bankruptcy, which causes an unstable impact on the economy and society. The estimated resource is about VND11 trillion.
In the second economic stimulus package, the MPI recommended cutting the deposit amount of travel companies by 80%.
This policy allows travel companies to receive an 80% reduction of their deposit amount according to the provisions of Decree 168/2017/ND-CP for two years to create cash inflow. It would help businesses maintain their operation and have working and production capital.
“The deposit amount from VND100-500 million depending on the type of business is in commercial banks and is refunded upon termination of the travel service business. Therefore, it does not affect the State budget revenue,” said the MPI.
According to the MPI’s proposal, the time for implementing this policy is two years, from November this year to November 2022. According to preliminary data, there are 2,667 international travel businesses; more than 500 of whom were licensed to do domestic travel business in 2019.
Additionally, the MPI proposed extending the deadline for paying taxes and land rent according to the provisions of Decree 41/2020/ND-CP for enterprises operating in sectors and fields strongly affected by the pandemic for another five months.
Specifically, extending the tax payment deadline (VAT, corporate income, personal income of business households, individuals, and land rental) in accordance with Decree 41/2020/ND-CP of the Government and consider extending additional tax periods to be deferred.
The supported subjects would be businesses, households, and individuals engaged in production and business activities and whose revenues mainly come from tourism services, accommodation, catering services and freight transportation.
This policy, according to the MPI, would have a positive impact on businesses, households and individuals able to maintain operations, generate revenue and retain positive net cash flow or maintain their profits.
Reduce VAT to stimulate consumption
As the unit assigned to sponsor and work with concerned ministries and branches in urgently proposing additional support policies for those facing difficulties caused by the Covid-19 pandemic, the MPI has studied and offered additional support policies, including new policies and policy extensions.
Accordingly, the MPI suggested a new policy to support workers in difficult circumstances to ensure social security for vulnerable workers (both those losing their jobs and raising children).
The beneficiaries are employees who are renting house and (or) raising under six-year old children whose labour contract or working contract has been terminated but not eligible for unemployment benefit; who are postponing the performance of the labour contract; and leaving unpaid work.
Specifically, support cash for workers in difficult circumstances (renting house, raising under six-year old children). The amount is VND1 million per person (household) per month or VND1 million per child under six years old, for up to three months.
Total funding support is expected to be about VND3,600 billion from November 2020 to the end of January 2021.
Along with that, the MPI also proposed reducing the VAT rate for essential goods to stimulate domestic consumption.
The reduction of VAT helps reduce the prices of goods and services and benefits consumers, thereby stimulating economic demand. It is estimated a 1% reduction in VAT could stimulate final consumption growth equal to 0.2% of GDP.
“However, this policy can have a strong impact on the State budget revenue. Moreover, the implementation may be difficult because VAT applies to import goods also. If only applying to domestic goods, it may violate the principle of non-discrimination between domestic and imported goods,” stated the MPI.
The ministry also proposed coupons and promotions for travel, accommodation and food services for travel service establishments, accommodations and restaurants to reduce transporting passenger cost, accommodation and meals to promote consumption in the tourism, restaurant and hotel service industries.
The coupons and promotions would apply to transport bills (air, rail, and road), hotel and restaurant bills. Depending on the item, the coupon would have different discount rates and a certain expiration date.
By Hoai Anh/ Ha Thanh