The Hanoi Department of Industry and Trade and other relevant agencies discussed ways that the State could adjust its policies to create a better environment for businesses to boost production and prevent the economy shrinking further.

Stimulating the consumer market and boosting production

Currently, the government’s stimulus package has helped businesses to gradually iron out snags in accessing capital and improving the quality of their products. However, the State should come up with additional policies to stimulate the domestic demand for consumer goods other than simply boosting production.

A representative from the Rang Dong Light Source & Vacuum Flask Joint Stock Company proposed that the State should pay more attention to consumer demand as boosting production cannot solve the problem on its own.

Tax policies and electricity prices - two burning issues

Many issues were debated at the conference. However, tax policies and peak hour electricity prices are two urgent issues for businesses.

According to the current calculation of electricity prices, enterprises have to pay hundreds of millions of dong every year to cover the cost of electricity at peak hours (from 9:30am to 11am). While many enterprises are encountering difficulties in production and a fall in business, they also have to cope with the high price of electricity.

Nguyen Van Do from the DHA Export Garment Company complained that his company often works from 7am to 18pm. Therefore, it pays an additional 40 percent for electricity at peak hours, equivalent to 500 million dong per year.

Trinh Sy, general director of the Trang An Joint Stock Company confirmed that the price of electricity at peak hours is unreasonable in the context of the current financial crisis. Many other enterprises have also asked for a refund of value added tax and individual income tax.

A representative from the Ha Noi-Kim Bai Beer Joint Stock Company said that the State should come up with a better policy on taxes to make it easier for businesses to increase production and sell their products. Currently, the corporate income tax rate remains high (at 25 percent) while businesses have to take out loans from banks and do not have the money to re-invest.

More businesses to have access to loans

Leaders from the Hanoi Department of Taxation agreed that the issues addressed at the conference are urgent but how to solve them effectively remains an open question.

Luu Tien Long, director of the Hanoi Department of Industry and Trade said the department is considering the number of businesses that can be granted loans.

Regarding tax policies, the Hanoi Department of Taxation is reducing and delaying the payment of value added tax, individual income tax and corporate income tax. It is also proposing some amendments and supplements to other tax policies that are not really suitable at the moment.