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Ho Chi Minh City
Wednesday, January 26, 2022

NA passes largest ever relief package for economic recovery, development

The Saigon Times

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HCMC – The National Assembly (NA) yesterday, January 11, passed a resolution on financial and monetary policies for the country’s economic recovery and development in 2022 and 2023 with a total value of over VND300 trillion, the largest ever.

Specifically, the NA gave its nod to a reduction of two percentage points in the value added tax in 2022, applicable to goods and services which are currently subject to the 10% value added tax, the local media reported.

In addition, the capital sourced from the State budget for development will be increased to a maximum of VND176 trillion in 2022 and 2023. Of the total, VND14 trillion will be invested in the healthcare sector, VND5 trillion allocated for the Vietnam Bank for Social Policies to compensate the interest of preferential loans, and VND3 trillion to support borrowers of loans within preferential credit programs with the current interest of over 6% per year.

Over VND3.15 trillion will be spent on building, upgrading, expanding and modernizing social protection, training, vocational and job centers.

To support enterprises, cooperatives and household businesses, the NA agreed to reduce the lending rate by two percentage points per year, with a maximum value of VND40 trillion, for some key sectors, enterprises, cooperatives and household businesses that are able to recover and pay debts, and offer loans to upgrade old apartment buildings and build social homes for workers.

Furthermore, a maximum of VND300 billion will be allocated to the tourism development fund.

The NA also agreed to source VND113.55 trillion from the State budget to develop traffic and information technology infrastructure, boost digital transformation, adapt to climate change and ease the consequences of natural disasters.

Moreover, workers in industrial, export processing and key economic zones will be supported in paying their boarding house rentals with a total of some VND6.6 trillion, sourced from the increased revenue and savings of the State budget in 2021.

As for monetary policies, the NA agreed to assign the Government to regulate monetary policies to stabilize the macroeconomy, bring inflation under control, ensure the safety of credit institutions, support the socioeconomic recovery and development and cut the lending rates by 0.5-1 percentage point in 2022 and 2023, especially for priority sectors.

A maximum of VND46 trillion from legal resources will be used to import Covid vaccines, drugs and medical equipment.

Additionally, some VND5 trillion will be sourced from the Vietnam Public-Utility Telecommunication Service Fund for the development of telecom infrastructure and the Internet.

Obstacles in the spending and management of the science and technology development fund in enterprises will be removed, while some VND5 trillion will be spent on renewing technologies, incubating scientific and technological firms, commercializing scientific research and technology development results, and purchasing equipment and machines for technology development, serving the production of enterprises and business activities.

These special policies will be mainly employed his year and next.

To mobilize capital for these policies, the NA allowed an increase in the State budget overspending by 1%-1.2% of the country’s GDP, equivalent to VND240 trillion, this year and next.

In addition, Government bonds will be issued, while official development assistance and other foreign preferential loans will be borrowed.

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