Alarming more than 13,000 businesses withdrawing from the market/month
According to the Report “Assessment of the impact of the Covid-19 epidemic on Vietnamese enterprises” by the Vietnam Chamber of Commerce and Industry (VCCI) and the World Bank, the Covid-19 pandemic took place from the beginning of 2020 to the end of 2020. has had a serious global impact. Not outside that spiral, Vietnam was heavily affected by the Covid pandemic.
According to the General Statistics Office, in 2020, there are more than 101,000 enterprises suspending business for a definite time, stopping operations waiting for dissolution procedures and completing dissolution procedures, an increase of 13.9% over the previous year. On average, 8,500 businesses withdraw from the market every month.
In 2021, in the first quarter alone, the number of newly established enterprises decreased by 1.4%; the number of enterprises withdrawing from the market increased by 15.5%; the number of enterprises returning to operation decreased by 0.5% over the same period last year. On average, every month, 13,400 enterprises leave the market.
Beverage businesses are heavily affected by the Covid-19 pandemic
Economic experts said that it is normal for businesses to withdraw from the market. Worryingly, however, is that, for the first time in a decade, the number of firms withdrawing from the market is higher than the number of new entrants. The main reason is due to the impact of the Covid-19 pandemic.
According to VCCI, 87.2% of businesses are affected by the Covid-19 epidemic. Most businesses said that the epidemic had affected their access to customers, cash flow and employees. Many businesses have had their supply chains broken, cash flow imbalances, and workers laid off due to business decline.
Hoang Ngoc Anh – General Secretary of the Vietnam Textile and Apparel Association (VITAS) said that the COVID-19 epidemic caused the textile and garment industry to lack orders, leaving 30% of industry workers underemployed in April 2019 and 70% of workers. the rest only work about 60% capacity. Besides, there are financial difficulties to serve production, maintain a team of workers…
Over the past time, the Government has launched a series of support packages, but the number of businesses accessing it is not much, and businesses still cannot get rid of difficulties. Not only that, the returning wave of the Covid-19 epidemic continued to negatively affect the production and business activities of many businesses. According to VCCI, the most affected industries are tourism, retail, passenger transport, beverages, …
Need to stabilize policies, not increase taxes and fees
Tax is a very sensitive field for production and socio-economic life, which has a great impact on the macroeconomic stability as well as the competitiveness of the economy, enterprises, and jobs. worker’s job…
In the context of the Covid pandemic wreaking havoc on the economy, many countries have supported businesses to overcome difficulties with tax incentives. For example, the Chinese Government exempts VAT for a range of services, deferred payment of corporate income tax… to support businesses. The U.S. government maintains tax incentives, including deferral of tax and fee collection, tax credits, reduced tax rates, and temporary reductions in rental prices for State properties.
Mr. Mac Quoc Anh – General Secretary of the Association of Small and Medium Enterprises in Hanoi, said that supporting businesses to maintain operations is an urgent solution today. It is necessary to continue to effectively prevent the Covid-19 epidemic, and at the same time remove difficulties for businesses so that businesses can rest assured to do business and recover after the Covid-19 epidemic.
Accordingly, in addition to financial support packages, tax relaxation and reduction for businesses and people, it is necessary to keep the policy environment stable and avoid increasing taxes and fees during this time. Because in the current context, the business situation is difficult, has not recovered, but increasing taxes and fees will put more burdens on businesses and may hinder the recovery of the economy – Mr. Mac Quoc Anh said. .
According to the Institute for Economic and Policy Research (VEPR), in Vietnam, tax reform needs to be built towards more effective income tax collection instead of expanding the basis for indirect taxes. Vietnam is a low-middle-income country with $3,500/person/year, so increasing taxes and fees will affect everyone, but the most affected will be the poor, who are vulnerable. hurt even more during the pandemic.
Currently, the Covid epidemic is still developing very complicatedly and shows no signs of stopping. Therefore, the Government, and directly the Ministry of Finance, should continue to review proposals for exemption and reduction of taxes, fees and charges, first of all on the sectors and fields heavily affected by the epidemic.
Experts all agree that the policy to support and encourage the recovery of enterprises, especially maintaining a stable tax policy, not raising taxes or issuing new taxes is a measure of “relief” for businesses. , nurturing revenue, not only helping to maintain jobs for workers but also a sustainable direction to recover the state budget in the future.
Le Kim Lien