According to the Vietnam Association of Seafood Exporters and Producers (VASEP), in the first 5 months of 2023, all major seafood export products recorded a sharp decline. For example, pangasius exports only earned 690 million USD, down 40.7%; shrimp reached 1.22 billion USD, down 34.4% over the same period in 2022...
Faced with the surrounding difficulties, on June 14, 2023, Official Dispatch No. 59/CV-VASEP compiled a report and proposed solutions to remove related difficulties for the fisheries industry in the current period.
According to VASEP, current bank interest rates and bank fees are too high. Meanwhile, seafood businesses mainly produce export goods and often borrow USD. However, since the third quarter of 2022, many banks have announced and immediately applied an increase in USD loan interest rates from 2.1-2.8% to 3-3.3% and even up to 4.5%, and currently most are at a high level of 4.1-4.9%, with some businesses higher than 5% in the context of a decline in seafood production and export.
Another issue of concern, according to VASEP, is the "credit tightening", limiting lending below the credit limit granted, new loans are only disbursed corresponding to old loans when previous debts must be paid.
In addition to the high interest rate mentioned above, if we include fees such as: money transfer fee from abroad (0.05%), L/C payment fee (0.1%), Bill endorsement fee (10 USD), document processing fee (10 USD), L/C acceptance fee for deferred payment (50 USD),...
In addition, VASEP also believes that the ceiling on interest expenses for calculating income tax is unreasonable, affecting business results as well as cash flow of enterprises in the first years of investment. While manufacturing enterprises are the ones that need capital support for investment and development, they are subject to this ceiling.
“Capital-credit-loan interest rates are currently the biggest and most stressful pressure on the industry. The Association hopes that the Government, the Ministry of Finance and the State Bank will consider it,” said a representative of VASEP.
Given the above difficulties, VASEP recommends that banks adjust USD loan interest rates to below 4% and VND loan interest rates to below 7% to support exporting enterprises. At the same time, seafood enterprises are allowed to extend their debt by 4-6 months for loans due in the second and third quarters of 2023 and continue to borrow according to the limit in the context of reduced exports in the first 6 months of the year so that enterprises can stably collect raw materials from farmers and fishermen and process and store goods to prepare for export in the following quarters of 2023.
In addition, VASEP also proposed directing credit to production and business, priority areas - including aquaculture, high-tech agricultural enterprises; creating favorable conditions for aquaculture enterprises and high-tech agricultural enterprises to access credit capital to serve production and business and create a basis to promote livelihoods for the farmer-fishermen chain ahead.
In particular, VASEP believes that it is necessary to have a credit package of 10,000 billion VND to stimulate demand and support seafood businesses in purchasing raw aquatic products for farmers.
Regarding solutions to reduce business costs through tax and fee policies, social insurance contribution rates and social insurance payment timing, VASEP proposed that the Ministry of Finance direct the acceleration of VAT refunds for exported goods and services; extend policies on tax exemption, reduction, and extension of tax and land rent payments and exemption and reduction of fees and charges until the end of 2023; Propose to reduce the contribution rate to the unemployment insurance fund for enterprises until the end of 2023; Study and amend, propose to reduce the unemployment insurance contribution rate from 1% to 0.5% and suspend the payment of occupational accident and disease insurance until the end of 2023; Reduce the trade union fee contribution rate from 2% to a maximum of 1% of the salary fund used as the basis for social insurance payment...
Regarding the problems in regulations on fire prevention and fighting, the State is currently applying new standards on the approval and acceptance of fire prevention and fighting works in enterprises. These regulations on conditions for ensuring fire prevention and fighting have not been classified according to the level of risk, have not distinguished in terms of scale and operational functions of each work, the conditions are too harsh and increase the costs for enterprises excessively; some regulations set out strict requirements that are not feasible in practice. Therefore, the Association recommends that the Government assign the Ministry of Public Security to preside over and coordinate with relevant ministries, branches and localities to promptly study and propose solutions in the direction of: Reviewing and amending regulations on fire prevention and fighting to classify the level of risk of fire prevention and fighting for production and business activities; applying conditions on fire prevention and fighting according to the level of risk; minimizing unnecessary costs for enterprises. For factories that have been planned for construction in advance, lacking or not ensuring regulations on fire prevention and fighting works, such as fire prevention tanks, regulations on installing automatic fire alarms in cold storages, etc., according to VASEP, it is necessary to consider the suitability and have a roadmap for application to create conditions for businesses to operate and overcome.
Regarding difficulties in investment procedures and construction licensing of old projects of enterprises, the Association recommends simplifying procedures (Article 41: Adjusting investment projects, Investment Law (amended) issued on June 17, 2020) for investment projects of seafood processing factories that have been previously granted investment certificates, are in operation and are now investing in increasing capacity/innovating technology (no need for land allocation/land lease).
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