Prime Minister Nguyen Tan Dung has signed a new resolution aiming to help ease the pressure on struggling businesses through policies such as extending payment deadlines on VAT and income tax, and making it easier for businesses to access loans.

Workers process cashew for export at Ha My 1 Company in Binh Phuoc Province, Photo: Tuoi Tre

A six-month extension for VAT payment for this year's second quarter has been granted to small and medium businesses (excluding lottery, stock, financial, banking, insurance, businesses and firms under major corporations), and businesses that use high numbers of labourers in production and processing of agriculture, aquaculture, textiles, footwear, infrastructure and electrical equipment.

In addition, the Government has also agreed a nine-month extension for business income tax backdated to 2011 for firms classified in the above two categories and those involved in mechanics, waterway transportation, steel and cement production.

The resolution also calls on the State Bank of Vietnam to implement resolutions for restructuring debts and other necessary steps to support businesses struggling to access loans.

The Government has also decided to reduce land rental payments in 2012 by 50 percent for businesses in commerce and services, and allow a 12-month extension for investors of projects that are in financial difficulties.

According to the resolution, the Ministry of Finance would also request the National Assembly to consider exempting individuals and households that provided housing and meals for workers, students and labourers, in addition to childcare facilities, from VAT, personal and business taxes in 2012.

The resolution also sets out appropriate solutions to increase the rate of reimbursement of FDI and ODA, and mobilise VND2,000 billion (US$95 million) in additional funds to upgrade canals and improve rural roads, as well as other infrastructure projects that would boost agricultural production, aquaculture and the development of trade villages.

According to statistics from the Ministry of Planning and Investment, by April 20, at least 82,000 businesses had reportedly dissolved, 16,000 others had to halt operations.

Source: VNA