Ho Chi Minh City Business Association (Huba) has just sent a report to the Ho Chi Minh City People's Committee on the operation of businesses in the city.
Accordingly, in the second quarter of 2023, the number of businesses lacking new orders accounted for 30-50%. Specifically, the leather, footwear and garment industry saw a 30-50% decrease in revenue; wood production and trading decreased by 30.9%; the rubber - plastic industry saw a 20% decrease in revenue; and the steel industry saw a 40-50% decrease in revenue.
In general, inventory increased, while domestic market purchasing power decreased by 10-20%.
According to Huba, businesses are lacking capital to operate and need capital to maintain the disrupted cash flow. In that context, although bank interest rates have decreased, they are still high. The State Bank has reduced the operating interest rate for the fourth time, but due to the delay, commercial banks' mobilization interest rates are still high, so businesses must continue to wait for interest rates to drop further.
Along with that, businesses are still facing difficulties when many types of administrative procedures have not been improved, combined with the fear of making mistakes of civil servants affecting production and business activities.
For example, implementing investment projects at this time is extremely difficult due to the shifting of procedures; tax refunds are difficult because, to be safe, the tax sector is very careful in refunding taxes, resulting in businesses lacking money to reinvest in business, pay salaries to employees...
From the above difficulties, Huba has made some recommendations. Specifically, continue to speed up the refund of value added tax for businesses with operating capital and paying salaries to employees. Currently, the verification of invoices and the origin of purchased goods takes a long time, affecting the cash flow of businesses.
In addition, the policy of reducing VAT by 2% in the last six months of the year (from July 1 to December 31, 2023) is considered to have a too short application period, not enough to have a deep impact on the economy.
Huba recommends that the Government consider applying an 8% VAT rate and extending the support policy until the end of 2024. At the same time, raise the minimum income subject to personal income tax.
Regarding the issue of capital for the economy, Ho Chi Minh City businesses assessed that bank loan interest rates of over 10% per year are not suitable for the profit potential of many units. Therefore, the State Bank needs to find a solution to reduce loan interest rates to below 8% per year, by reducing mobilization interest rates, reducing borrowing costs and controlling the net profit margin of commercial banks.
When evaluating, banks need to increase the ratio of mortgaged assets closer to reality; increase the ratio of unsecured loans; lend according to contracts or mortgage with assets, property rights formed in the future..., Huba suggested.
Previously, at the conference to review the socio-economic situation in the first 6 months of the year and tasks for the last 6 months of the year held on the afternoon of June 29, Chairman of the Ho Chi Minh City People's Committee Phan Van Mai requested that the city's departments and branches focus on synchronous and effective coordination to remove difficulties for businesses.
"We should not let any more rumors about this department, that official or the city being sluggish cause congestion for people and businesses," Mr. Mai emphasized.
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