Hanoi provides support for business amid Covid-19 resurgence

06:00 | 14/08/2021 Society

(VEN) - Hanoi is providing support for businesses affected by the resurgence of Covid-19.

Declining revenues, rising costs

According to the Hanoi Department of Planning and Investment, the number of enterprises temporarily suspending operations reached 6,900 in the first five months of 2021, an increase of 22 percent compared to a year ago. Data from the Hanoi Small and Medium Enterprises Association show that in the first half of the year, the number of enterprises falling into severe difficulties accounted for 11 percent of the total, while firms facing difficulties and needing support and those in the process of stabilizing production accounted for 45 percent and 44 percent, respectively. These enterprises faced difficulties in capital and production due to pandemic prevention regulations.

The revenue of transport companies has decreased due to Covid-19

According to the Hanoi Department of Transport, due to negative impacts of Covid-19, inter-provincial passenger transport from and to Hanoi reached 47 percent of capacity in May compared to April and decreased by 28.7 percent compared to a year ago. Bus transport decreased by 30 percent in capacity compared to a year ago and 41.5 percent compared to the previous month, corresponding with drops of 40 percent and 51.2 percent in revenue. The revenue of transport companies has decreased, while their expenses on loan interest, taxes, land rent, road usage fees, parking fees and salaries have grown.

To overcome difficulties for transport companies, the Hanoi Department of Transport has proposed that the Hanoi People’s Committee approve the adjustment of capacity and revenue targets of public passenger buses in 2021, and provide preferential loans for investment in new buses to improve service quality.

The Hanoi Small and Medium Enterprises Association has also proposed to the government and city authorities to exempt enterprises from land use tax for six months of 2021 to compensate for periods of suspended production in 2020 and 2021 due to Covid-19, and to review and eliminate administrative procedures for businesses to make it easier for them to increase production scale.

Hanoi continues to support business recovery and development

Preferential loans

To support businesses, the Hanoi Small and Medium Enterprises Association has organized trade promotion activities, while pushing for greater networking among enterprises. In addition, the association has organized seminars on digital transformation, helping firms change their business models.

Since the beginning of the year, credit institutions in the city have restructured repayment periods for 64,071 customers with total outstanding loans of VND86.654 trillion, waived or reduced interest rates for 165,139 customers with total outstanding loans of VND316.703 trillion, and provided new loans worth VND830.582 trillion to 85,260 customers at preferential interest rates. The Hanoi branch of the State Bank of Vietnam is continuing to coordinate with relevant departments and agencies on solutions to support businesses affected by the pandemic.

The Hanoi People’s Committee issued Decision 5742/QD-UBND on supporting small- and medium-sized enterprises during the 2021-2025 period, aiming to maintain an average growth rate of new businesses at around 10 percent per year (about 30,000 enterprises), and create about 1.5 million new jobs. The decision calls for small- and medium-sized enterprises to contribute more than 25 percent to the city’s total export turnover, over 40 percent to the city’s gross domestic product (GDP) and more than 30 percent to the city’s budget.

To promote trade, the city will strengthen promotion activities, implement exemption and reduction of corporate income tax for a set period and help companies develop e-commerce.

Quynh Hoa