The Ministry of Labour, Invalid and Social Affairs has proposed the Government issue a VND20 trillion (US$843 million) bailout package to soften the economic impact of the COVID-19 pandemic.

Shops close their door due to COVID-19 pandemic in a local street in Hanoi.

Under the proposal, an employee will be allowed to borrow VND100 million (US$4,200) and a producer or a small business will be allowed to borrow VND2 billion (US$84,470) with an interest rate of 3.96% annually, half of the current borrowing interest rate for poor households. The loans must be repaid within 12 months.

The ministry also submitted three solutions to help businesses survive during the pandemic.

To fund each of the solutions, the budget of each locality would be paid in advance to lend to local businesses and the amount will be refunded from revenue when liquidating businesses' assets, the ministry said.

The ministry added that if the refund was not enough, the locality could report to Prime Minister Nguyen Xuan Phuc for further consideration.

The first solution is businesses that have at least 30% of their employees or at least 100 employees temporarily suspended from work due to difficulties triggered by the pandemic would be allowed to borrow money to pay salaries, social, health and unemployment insurance for employees.

The State budget would cover the interest on the loans for a maximum of three months per business. If approved, the support will be implemented between April and December.

Secondly, businesses that are forced to let go at least 10 percent of their employees or at least 50 employees due to the pandemic could borrow money to pay job-loss allowance for employees.

Thirdly, employees whose businesses dissolved or went bankrupt would receive the job-loss allowance. The ministry said about 55,000 -110,000 employees would lose their jobs due to COVID-19 pandemic.

The money to pay for job-loss allowance is estimated at about VND530 billion – 1.06 trillion (US$22.3 - 44.7 million).

The ministry also suggested the Government issue a policy to temporarily halt or exempt unemployment insurance payment for both businesses and employees.

It recommended exempting tuition fees for students who are members of COVID-19 infected families. In addition, a reduction of 15-20% of tuition fees in the school year of 2020 for all students to share the burden with parents nationwide should be applied, the ministry said.

Another proposal was made to extend the tax finalisation of 2019 and exempt taxes incurred in the first six months of 2020 for all private and public educational institutions.