Hanoi (VNA) – A package of fiscal and monetary solutions worth a total of 291 trillion VND (nearly 12.8 billion USD) to support socio-economic recovery and development has been pro❀posed by the Government in a draft resolution delivered by Minister of Planning and Investment Nguyen Chi Dung, at the first extraordinary session of the 15th National Assemblyꦍ (NA).

6 trillion VND to be spent on reducing business costs

Under the draft resolution, the package aims to speed up the recovery of the production chain and labour supply, motivating growth towards the targeted average growth rate of 6.5-7 percent in the 2021-2025 period. The Government plans to increase overspending by 240 trillion VND in 2022 and 2023 to provide direct aid from the State budget, including 64 trillion VND in tax, fee, and charge reductions; and spending directly from the budget by 176 trillion VND. According to Minister Dung, the scheme has provided tasks and solutions for the implementation of each of the smaller packages. About 60 trillion VND will be spent on opening the economy and enhancing national capacity in health care and pandemic prevention and control, he said.  Accordingly, the Government plans to use 53.15 trillion VND to ensure social welfare and employment, 110 trillion VND to support the recovery of enterprises, cooperatives and business households, and 113.85 trillion VND to develop infrastructure systems. Meanwhile, more efforts will be made to continue to speed up institutional and administrative reform, as well as business environment improvements. The limit of Government-guaranteed bond issuance will be raised by a maximum of 38.4 trillion VND for the Vietnam Bank for Social Policies to offer concessional loans helping with job provision. In the package of monetary solutions, the Government suggested lending interest rates be cut by at least 0.5-1 percent over two years, aside from other policies supporting enterprises.  About 46 trillion VND from other legal financial sources will be used to import vaccines, medicine and medical equipment for COVID-19 prevention and control.

Careful consideration of tax reduction, exemption scale

The scheme received support from the verification agency of the proposal, the NA Economic Committee.  Vu Hong Thanh, Chairman of the committee, underlined that the committee accepts the increase of the State budget deficit to a higher rate of 1-1.2 percent of GDP over the two years of the scheme’s implementation (2022-2023). Regarding tax policy, Thanh said that the majority of members of the committee agree on the policy of reducing and exempting several types of taxes, including a reduction of 2 percent in value-added tax to products that are projected to 10 percent of export tax rates, but underlined the need to carefully consider the subjects for application.  They stressed that it is necessary to focus on industries and sectors that need to be stimulated while excluding products subjected to special consumption tax. Thanh said that the committee agreed on the use of 6.6 trillion VND from the central budget as house rent assistance for workers, and recommended suitable and effective solutions for its implementation. Regarding the support for interest rates, the representative of the verification agency said that most of the committee members showed support for the policy.  However, they pointed to the need to focus on important sectors as well as enterprises, cooperatives, and business households that showed good payment capacity and had high prospects of recovery or credit guarantees, while giving loans to upgrade apartment buildings, construct social houses and houses for workers, specifying the subjects, scope and conditions for capital borrowing and strictly controlling the implementation of the policy to avoid profiteering, he said./.