On Friday 23 July, EuroCham and KPMG hosted a webinar to share the latest updates on government measures to support companies and their workers during the current fourth wave outbreak of the COVID-19 pandemic. The event gathered over 200 attendees and featured special guest speakers Andrea Godfrey, Partner & Head of Global Mobility Services for KPMG in Vietnam; and Hai Ha Nguyen, Director of Tax & Corporate Services.
EuroCham Executive Director Delphine Rousselet opened the webinar, and set the scene for the presentation from KPMG: With Vietnam in the midst of a fourth wave COVID-19 outbreak, the government has introduced a number of policies to support companies and their workers to weather this storm, the latest of which are Resolution 68 and Decision 23.
In her presentation, Andrea Godfrey provided a background to Vietnam’s current socio-economic environment: Cases of COVID-19 continue to rise – particularly in the South – and this could have an impact on economic growth in 2021. Around 50,000 businesses have closed or been suspended so far. As a result, unemployment has risen while average incomes have fallen. Industries hardest hit include F&B, transport, and tourism. However, foreign direct investment remains robust and should return to previous levels if vaccination programs proceed as planned.
In 2020, the government announced a “62 trillion” package through Resolution 42. However, disbursement was slow, procedures complicated, and take-up low. Reflecting on lessons learned, the government has decided to provide more support for companies and workers in 2021, in particular those who are low-skilled or vulnerable; and to speed up the disbursement process.
Hai Ha Nguyen then discussed Resolution 68 and Decision 23, both issued in July 2021, which were issued based on the lessons learned from previous waves of the pandemic. First, for employers, these regulations include a 12-month drop to 0% contributions to the Labour
Accidents and Occupational Diseases Insurance Fund, and a suspension of up to 12 months for contributions to the Retirement and Survivorship Fund. They also include financial support for vocational training and an interest-free loan to cover salaries for up to three months of the regional minimum wage. Meanwhile, for employees, the regulations also include support packages for those who lose their jobs and, in particular, for those raising children. Ms Nguyen also discussed how these regulations are being implemented in practice.
Andrea Godfrey then compared the recent regulations to those issued in 2020. She said that the new regulations have covered more beneficiaries, looser lending conditions, simplified procedures, and clearer approval. However, there are also some uncertainties. These include how to define ‘bad debt’ for lending assessment and the procedures for freelancers, which could be subject to different interpretation at the provincial level.
In the Question & Answer session, speakers and audience discussed the tax implications of support packages; the verification requirements around training funds; support for the manufacturing sector; and whether companies can request rent reductions.
Concluding the event, Andrea Godfrey said that the government’s regulations are a positive step forward, and are much clearer than those announced in 2020. Hai Ha added that the disbursement should also be improved this time, and Andrea Godfrey advised companies to have the policies and documentation to evidence what they have used the support funds for.