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Following Resolution 68 of July 1st, 2021, the Vietnamese authorities have issued additional recommendations to support the industries, businesses, and individuals which were especially hit hard by the COVID-19 pandemic and lockdown in 2021. The new Resolution (105/NQ-CP 9, September 2021) is aimed to encourage various authorities and officials of the country to develop, create, and maintain favorable measures to ensure the smooth recovery of businesses and the Vietnamese economy.
One of the most serious consequences of the lockdown and pandemic in Vietnam has been the shutdown of many factories and operations, thus tremendously affecting and deteriorating cash flows of enterprises. Thus, the measures as indicated in Resolution 105 are aimed at reducing the costs and providing easier labor conditions. Some of the proposed fiscal measures include potential reduction in taxes, charges, land rents, statutory fees, reduction of social insurance premiums, and elimination of late payment fees. Other important suggestions mention the effective distribution of vaccines prioritizing the workforce in the key industries and economic zones of the country.
An important notice for foreign employees relates to the proposed simplification of work permit related procedures. In particular, relaxing the standard conditions on the work permit issuance or extension for expats based in Vietnam.
As far as financial institutions are concerned, the authorities recommend potential reduction of rates on loans, supporting small and medium enterprises by measures such as extending loan terms, reducing fees, and allowing businesses to postpone/reschedule their debt schedules.
We should note, that although the resolution is in place, thus far it has only outlined the key areas for consideration and improvement. The official announcements of specific policies shall follow, and we recommend monitoring comments and official releases from the relevant local authorities. At PHC Advisory, we continuously monitor the recent updates of tax policy and economic recovery in Vietnam. Please, feel free to contact us at info@phcadvisory.com for more information.
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