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Proposing a stimulus package of VND 10,000 billion to support Vietnam's seafood businesses

VASEP proposed the State Bank consider a stimulus package of VND 10,000 billion for aquaculture in the Mekong Delta.

After the Covid-19 epidemic period, many input costs continued to increase and remained high; While the selling price of many key seafood products has increased insignificantly, they are also under pressure from customers to reduce prices, negatively impacting farmers, fishermen, and export processing factories, the Association of Seafood Exporters and Producers. Vietnam seafood processing and Exporting (VASEP) said in a recent dispatch to the Ministry of Planning and Investment.

Seafood exports in the first 5 months of this year continued to decline by double digits compared to the same period last year, reaching only 3.38 billion USD, down 28%. Enterprises in the industry all assess that the current decline and disruption are more serious than the period of the Covid-19 epidemic.

According to VASEP, seafood enterprises, which mainly produce export products, often borrow USD.

From the third quarter of 2022, the USD interest rate has increased sharply from 2.2 - 2.8% to 4.1 - 4.9%, there are businesses 5% higher in the context of the decline in production, and seafood export. Other fees related to international trade are also high.

In addition to the "credit tightening", limiting lending below the granted credit limit, new loans are only disbursed in proportion to the old loan when the previous debt has to be repaid.

The imposition of a ceiling on interest expense for income tax calculation is also unreasonable, affecting business results, as well as the cash flow of enterprises in the first years of investment. While manufacturing enterprises are subject to capital support for investment and development, they are subject to this ceiling.

Capital-credit-interest rates are currently the biggest and most stressful pressure on the seafood industry, VASEP stated.

In addition, businesses are currently facing challenges from labor problems when orders drop sharply, inventories are high, and financial cost pressures are high - many businesses face the challenge of downsizing production. production, reduce working hours, and lay off workers.

Challenges from increasing costs include the cost of raw materials, interest, logistics, electricity, packaging, labor, etc. And inadequacies in licensing and guiding procedures for businesses to install rooftop solar power to use for the production of enterprises (processing, shrimp-fish farms) and not to generate electricity to the general grid.

Therefore, to support businesses in the next quarters, the association recommends: first, adjusting the USD loan interest rate below 4% and VND lending interest rate below 7%; Deferral for 4-6 months for loans due to be paid in the second and third quarters of 2023 and continue to be borrowed according to the limit.

At the same time, direct credit to production and business, priority areas include fisheries, agricultural enterprises applying high technology; amending Point d, Clause 2, Article 5 of Decree No. 132/2020/ND-CP to cancel the regulation that considers borrowing transactions between banks and enterprises to borrow long-term loans for investment as associated transactions, helping businesses are not subject to ceiling interest expenses when calculating corporate income tax.

Second, the State Bank continues to pay attention and consider having a stimulus package of VND 10,000 billion for aquaculture in the Mekong Delta.

The stimulus package is for exporters who actually buy raw material reserves from now on for export in 3-6 months in 2023 and in the first quarter of 2024, responding to the situation that export orders are not in the current period. current paragraph. Implemented stimulus early will make aquaculture farmers peace of mind to continue stocking instead of hanging ponds in the current period.

Third, there will be solutions to cut business costs soon through policies on taxes, fees, social insurance premiums, and time of payment.

Fourth, the Government directs to continue lending to businesses from the social policy bank to pay workers' stoppage wages and avoid layoffs. At the same time, allow and guide the procedure for installing off-grid solar power (Zero export) for production use (processing, shrimp-fish farming).

Fifth, regarding new standards in appraisal and acceptance of fire prevention and fighting, works in enterprises, according to VASEP, these regulations are currently not classified according to risk level, not differentiated in terms of regulations. operation size and function of each project, the conditions are too harsh and increase the costs excessively for the business; Some regulations put forth strict requirements, which are not feasible in practice.

The Association proposes to the Government to review and amend regulations on fire prevention and fighting in order to classify the level of fire prevention and fighting risks for production and business activities; apply fire prevention and fighting conditions according to the level of risk; Minimize unnecessary costs for businesses.

For factories with pre-planned construction, lacking or not meeting regulations on fire prevention and fighting works, such as fire protection tanks, regulations on automatic fire alarm installation in frozen warehouses, etc.: it is necessary to consider the suitability. , there is a roadmap to apply to facilitate business operations and remedy.

For units that have been approved and accepted for fire prevention and fighting according to the old standards: extend the operating time for at least 2-3 years so that the enterprise has time and funds to upgrade, repair and replace the fire protection system. fire protection system according to new standards to meet the requirements of the law.

Finally, simplifying procedures for adjusting investment projects, in the Law on Investment (amended) promulgated on June 17, 2020, for investment projects in seafood processing plants that want to invest in increasing capacity. /technological innovation (no need for land allocation/land lease).

According to VASEP, this recommendation comes from the fact that, in the current difficult context, some enterprises have to carry out the process of investing in technological innovation, expanding the depth to increase output capacity (without generating demand). land allocation/land lease), enterprises must carry out procedures to apply for a policy like the first grant project (consult many departments and agencies, this department waits for the other department's response, then submits to the Provincial People's Committee for a decision to approve the policy). , which is very complex and lengthy).



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