Businesses looking forward to social security measures

July 01, 2021 | 07:00

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In addition to the desire to receive tax and financial support, many businesses also expect the government’s new support package to include more social security incentives to support businesses that are directly suffering from the impacts of the latest pandemic wave so that they can ensure their jobs and full pay for workers.

VSS is looking into policies that would see F1 and F2 workers going into isolation supported financially. Photo: Le Toan

Despite withstanding the pandemic for more than a year, by the latest outbreak Nguyen Thi Xuan Lan, Golden Life Travel CEO, admitted that her business was exhausted and would find it hard to recover without quickly getting support as soon as possible.

Lan said that Golden Life Travel is currently enjoying a 5-month tax payment extension and 30 per cent corporate income tax (CIT) reduction. However, the CIT cut is almost meaningless for tourism businesses because the business makes a loss and there is no profit to pay tax.

Lan proposed that authorities should exempt CIT and reduce VAT by 50 per cent for tourism businesses, especially travel agencies. At the same time, she also hopes that the government will have more practical policies for tourism workers, helping businesses easily borrow capital to keep their core workforce.

Vietnam’s state-owned textile and garment group Vinatex also pointed out the factors that prevented many domestic businesses from accessing the first support package launched last March.

According to Vinatex, it is difficult for businesses to borrow money to pay wages to stop working for employees because most businesses only extend working hours, while the loan conditions stipulate that employees must stop working for a month or more.

The credit support package of banks also has many inadequacies in the implementation stage because of complicated procedural requirements.

Vinatex recommends that the new support package should focus on solutions in which businesses are offered tax and financial support, and employees are supported directly through social security packages.

According to Vinatex, the conditions for receiving support for loans to pay salaries can be adjusted in the direction that businesses that ensure job maintenance for 100 per cent of employees will be supported with lower bank interest rates.

Conditions for receiving support to stop paying into retirement and survivorship funds should also be considered based on the loss of business and production of the enterprise, not just the number of employees who quit their jobs.

While waiting for the government to make the final decision, two agencies representing the interests of workers, the Vietnam General Confederation of Labour (VGCL) and Vietnam Social Security (VSS), also made many proposals to share difficulties with businesses and employees affected by the pandemic.

According to the representative of the VGCL, it has submitted to the government a consideration to add more workers who need support due to the impact of the ongoing pandemic.

About 60,000 employees are working at businesses and educational institutions that have been suspended from operation according to the requirements of pandemic prevention and control, and whose salaries are lower than the regional minimum wage. F1 and F2 workers will receive a support figure of VND1 million ($43.50) per person.

VSS also agrees with the recommendation on the proposal to exempt employees from paying health insurance premiums, for a maximum period of 8 months, from now into January next year.

If an employee has participated in health insurance for two consecutive years but loses their job, he or she will also be able to maintain a social insurance card for a maximum period of eight months.

The VGCL expects the number of people to be exempt from paying health insurance premiums is 50,000, at a total amount of VND33.6 billion ($1.4 million).

Along with this exemption, VSS also proposes a policy of supporting VND80,000 ($3.50) per person per day for F1 and F2 employees who must undergo isolation during the period from June 1 to December 31, 2021.

The plan to suspend social insurance contributions to the retirement and survivorship fund for businesses affected by the pandemic is also being proposed.

Businesses will be temporarily suspended from paying social insurance premiums in case of a reduction of 10 per cent or more in the number of employees participating in social insurance at the time of application submission; or full payment of social insurance contributions by the end of April 2021 and operating in transport, tourism and hospitality, education, culture, sports, or working at industrial parks or other concentrated working areas that are isolated and blocked.

“It is forecasted that there will be about 39,000 units and enterprises with about 1.15 million employees and the amount of money temporarily suspended to contribute to the retirement and survivorship fund will be about VND8.45 trillion ($367 million),” a VSS statement said.

Dinh Mai Hanh, deputy director of the Department of Social Insurance Book and Health Insurance Card, said the policy of suspending the payment of the death and retirement fund has been implemented since 2020 but has had conditions expanded this year.

“This suspension will not affect the insurance fund or the benefits and short-term benefits of employees. Other funds such as unemployment or occupational accident insurance have to be paid normally by businesses so that if employees have any problems, they can still enjoy full benefits,” added Hanh.

Vo Tien Dung - Director of External Relations, Community and Environment, Nui Phao Mining Co., Ltd.

Businesses looking forward to social security measures

The national COVID-19 vaccine fund plays a very important role in disease control as well as economic development. The fund also shows the good tradition and solidarity of the Vietnamese people, and contributes to reducing pressure on the state budget and ensuring vaccine access for all people in Vietnam.

The mobilisation and promotion of responsibility of people and businesses to fight COVID-19 is a great initiative, demonstrating the government’s flexibility to overcome difficulties. The vaccine fund will certainly make an important contribution to repel the pandemic, helping domestic enterprises soon return to normal and attract more foreign investment.

As one of the major enterprises in Thai Nguyen province, every year, Nui Phao spends billions of VND for socioeconomic development support for the local community.

Last June, the company donated 1,000 cloth masks to Thai Nguyen Provincial People’s Committee and contributed $13,000 to the province’s pandemic prevention fund.

The company always gives top priority for health protection of employees. Together with the owner group, Masan High-Tech Materials, the company also established a Masaners' fund to support quarantined workers, and conduct COVID-19 tests every seven days for employees and contractors. So far, nearly 2,400 tests have been performed by the Real-Time PCR method, and 38 senior office clerks have been vaccinated.

Hong Sun - Vice chairman, Korean Chamber of Business in Vietnam

The launch of the national pandemic vaccine fund to mobilise contributions from the people and businesses is a good initiative. We highly support this government’s effort because COVID-19 is not the fight of only the government, or an organisation, but also of the whole nation and businesses as well – and the contribution to the national vaccine fund is evidence of the solidarity of Vietnamese people.

To support this effort, South Korean enterprises in Vietnam have made contributions to the fund, and we will continue to support the country and its people in this fight.

At present, workers in industrial zones are being prioritised in order to get vaccinated, especially those in high-risk areas. This is not only a healthy solution but also shows the Vietnamese government’s attachment to importance to stablisation of production and safety of labourers.

We highly appreciate this government policy as many South Korean businesses in Vietnam are mainly focusing on production activities. In previous outbreaks they were not hit as hard, but this time is a different story.

Therefore, the COVID-19 vaccinations for workers at these industrial zones increase confidence among foreign investors in Vietnam, as well as importers of goods from the country.

Alain Cany - Chairman, European Chamber of Commerce in Vietnam

The government’s vaccination fund is a good initiative in principle. The only way out of this current wave is an ambitious and accelerated mass vaccination programme, and the European business community wants to help Vietnam achieve this.

In practice, however, the fund needs some clarification in order to encourage the greatest possible contribution from international investors and private enterprises. One issue we face is that businesses are often not allowed to make donations to government funds. We want to be sure that the fund is transparent and that it is clear where donations will go.

EuroCham recommends that the government consider taking a two-track approach: where pure donations could make up one part of the fund, while a second stream would allow companies to purchase vaccinations for their workers and their families.

This second stream would help to reduce the financial burden on the government. If these concerns can be addressed, this fund could help accelerate Vietnam’s mass vaccination drive and ensure that we can return to normal life more quickly.

European companies can contribute to Vietnam’s vaccination drive through support with their vaccine knowledge; continuing to contribute to the COVAX scheme; and sharing logistical and technical expertise in the mass vaccination rollout. This includes not just our medical companies but also our members in logistics and other important sectors.

Aleksandrs Parfjonovs - Head of Vietnam Operations, Grindeks JSC

It is very well understood that the latest COVID-19 wave hit Vietnam probably harder than the others, but the government is trying its best to improve the situation by allowing private companies to import vaccines and set up funds.

Still, vaccinations are going much slower than is needed to achieve community immunity so Vietnam can get back to normal again. It would be great if the government would consider more support, including financial incentives, for companies willing to bring vaccines into Vietnam, as it is very difficult and often requires large investment.

Local facilities might be a good solution, however currently there is lack of suitable manufacturing and important distribution chains. The government should also allow companies to bring their own vaccines from abroad, to speed up vaccination and prioritise groups and areas.

I personally hope that there will be new regulations allowing shorter quarantine for vaccinated foreign experts, for example seven days, which is seen more and more commonly globally as Vietnam still needs experts to come to the country. To keep the economy going amid the current 21 days quarantine and seven days of self-isolation is unacceptable for most foreign experts, as this is one of the longest quarantine periods worldwide.

Pham Hoang Hai - Executive director, ICHAM Vietnam

In this period, vaccinations are the most effective way to help build protection. Many governments around the globe, including Vietnam’s, are accelerating mass vaccination programmes to achieve herd immunity in the shortest time possible.

However, the current vaccine production capacity in the world is still significantly below the actual needs of countries. Therefore, we evaluate the recent policy of the government to diversify supply sources of vaccines as a very effective and wise method.

In addition to protecting people’s health, one of the other important goals of the government is to restore the economy and strive to achieve that goal in the short and medium term. We feel that the establishment of a national vaccine fund to mobilise resources for society as well as business to overcome this difficulty is a reasonable initiative at this time.

We conducted a survey in the Italian business community operating in Vietnam and they all said they would rather pay for vaccinations for 100 per cent of their staff working in Vietnam. This proves the desire to support and work to share the financial burden with the government.

We also hope that the government will create conditions for a vaccine passport policy. We, as well as many entrepreneurs and businesses from Italy, are looking forward to having the opportunity to return to Vietnam to continue researching, investing and doing business in the market.

By Hoang Oanh

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