The Government is to roll out a VNĐ118 trillion (US$5.2 billion) COVID-19 relief package by the end of the year, said deputy minister of finance Nguyễn Đức Chi during a government meeting on Wednesday. 

 

The package's main targets are businesses that have been affected by the pandemic. If qualified, they would be eligible for tax cuts, reduction in land use fees and delays for other payments. Industries that have been severely affected by the pandemic such as tourism and transport may look forward to VAT tax exemptions on top of other support measures. Another relief package worth up to VNĐ20 trillion is being considered to help businesses facing extraordinary difficulties. 

 

Notably, the ministry has proposed the Government slash taxes and fees by half for small-to-medium-sized businesses and businesses with annual sales under VNĐ200 billion.

 

"The Ministry of Finance has been gathering opinions and feedback from other ministries and Governmental agencies regarding the packages. Once completed, a proposal will be presented in the earliest working session of the National Assembly Standing Committee for review," said Chi. 

 

Meanwhile, major commercial banks with the State as a shareholder including Vietinbank, Vietcombank, BIDV and Agribank have agreed to cut interest rates in the amount of VNĐ4 trillion. The banks said they will further reduce another VNĐ4 trillion in interest rates for businesses in HCM City and southern Bình Dương Province, and certain provinces that have been put under lockdown since late May. In addition, all banking services for said localities will be provided free of charge. 

 

Đào Minh Tú, deputy governor of the State Bank of Vietnam (SBV), said the SBV has instructed commercial banks to adjust interest rates since the beginning of the pandemic. Interest rates for business loans have declined by 1.2-1.5 per cent on average during last year. During the first seven months of 2021, banks have further slashed their interest rates by 0.5 per cent. 

 

As the country fights to contain the virus. The SBV has asked banks to cut back on their own expenses to ensure they have more resources dedicated to supporting businesses. The Vietnam Banks Association and its 16 members have pledged to reduce interest rates for business in the amount of VNĐ20.5 trillion by the end of the year, Tú said. 

 

"The SBV's top priority is for businesses to receive all the support they require to mount a comeback once the pandemic is under control," he said. The SBV also said it will keep an eye on the banks to make sure they will make good on their pledges. — VNS