Vietnam is considering a second stimulus package to aid the economy amid the COVID-19 pandemic with the focus on the aviation and tourism industry and boosting consumption. (Photo thoibaokinhdoanh.vn)Hanoi (VNS/VNA) - The second stimulus package to aid the economy amid theCOVID-19 pandemic would focus on the most affected sectors, including aviation,tourism and consumption, according to the Ministry of Planning and Investment.
The ministry has recently sent the draft of the second stimulus package torelevant ministries and agencies for comments, which included strong fiscalpolicies for vulnerable businesses and community groups.
The highlight was policies for the aviation and tourism industry.
The ministry proposed special policies to remove difficulties for aviationcompanies which were seriously suffering from the pandemic.
Accordingly, the Government could provide guarantees to aviation companies ingetting loans together with mechanisms for the State Capital Investment Companyto invest in airlines.
The policies for the aviation industry would support cash flow and liquidityfor airlines to help them avoid bankruptcy which might bringinstability to society and the economy.
The financial support for the aviation industry in Government-backed loans wasestimated at around 11 trillion VND (474 million USD).
Due to the impacts of the COVID-19 pandemic, aviation companies were facingtumbling revenues and shortages of cash which might push them into insolvency.
Tran Thanh Hien, chief accountant of the national carrier Vietnam Airlines,said that airlines could run out of cash if they did not receive new short-termloans.
Many countries have already launched support packages for the aviationindustry, such as the US’ 58 billion USD coronavirus-rescue package andGermany’s 9.8 billion EUR aid package for stricken airline Lufthansa.
The ministry also proposed a 70-percent reduction on environmental protectiontax on jet fuel in 2021 with an aim to reduce costs and ease the pressure oncash flow for struggling airlines.
The reduction could cause a drop of 2.46 trillion VND to State budget revenue,according to the ministry.
For the tourism industry, the ministry proposed a reduction of 80 percent ofdeposits for two years, from November 2020 to November 2022, aiming tohelp tourism enterprises have more working capital for their operation.
Tourism companies must have deposits worth 100-500 million VND at commercialbanks.
Statistics showed that there were more than 2,660 tourism companies providinginternational tours and 500 domestic ones in 2019.
The ministry also proposed another five-month extension of deadlines forpayments of taxes and land use fees regulated in Decree 41/2020/NĐ-CP forenterprises operating in affected sectors.
The ministry also proposed value added tax (VAT) on necessary consumer goods tobe reduced to promote consumption.
The tax reduction would help lower prices of goods and services which wouldstimulate shopping.
It was estimated that every one per cent reduction in VAT could promoteconsumption equivalent to 0.2 percent of gross domestic product, according tothe ministry.
However, the ministry noted that this policy might have a significant impact onthe State budget revenue.
The ministry also proposed a sum worth 3.6 trillion VND to be spent providingsupport to people in difficulties, including those who lost jobs and had toraise children.
The first stimulate package was worth 181.4 trillion VND, or three percent ofthe country’s GDP in 2019.
It included a fiscal support package worth 73.1 trillion VND, a monetary andcredit support package worth 36.6 trillion VND, a social welfare package worth 62trillion VND and other packages including support in power prices andtelecommunication service prices.
Vietnam has gone through 62 days with no community infections reported./.
VNA
