The Government needs to have more practical and quicker support policies to help businesses, especially small ones, recover from the effects of the COVID-19 pandemic, business executives have said.

Workers bottle honey at Xuan Nguyen Group Joint Stock Company. 

The General Statistics Office said in the first five months of the year, 26,000 firms temporarily ceased operations, well more than a third up from the same period last year.

Nearly 6,100 businesses closed down, down 5%, 2,200 of them in wholesale and retail and automobile and motorbike repair, it added. 

The prolonged pandemic has had a severe impact on the Vietnamese business community, especially small companies. They need financial support as well as policies to recover after the pandemic.

The Government has come out with a number of policies that seek to help businesses resume operations.

Recently, it submitted a tax cut proposal to aid businesses to the National Assembly for approval.

It seeks to cut the corporate income tax by 30% this year for firms which have revenues of up to VND50 billion (US$2.61 million) and 100 workers.

But Lu Nguyen Xuan Vu, CEO of Xuan Nguyen Group Joint Stock Company and a member of the executive committee of the HCM City Union of Business Associations, said while these policies are practical their enforcement has been tardy.

“We expect these policies to benefit businesses faster because it is essential for them to recover [quickly] after the pandemic.”

Regarding to the tax cut proposal, he said an income tax reduction of 30% would not be beneficial since very few businesses would make profits this year.

Many businesses and business groups have urged the Government to reduce the value-added tax for at least one year, especially for businesses involved in agriculture.

If the Government cuts value-added tax from 10% to 3-5%, production costs and prices would go down, and consumers would buy, they said.