Vietnam mulls tax cut for SMEs

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The government will consider cutting corporate income tax for small and medium-sized enterprises to help them focus their capital on production, Deputy Prime Minister Hoang Trung Hai said Friday.

He said the government has issued a resolution aiming to help the country achieve its growth target of 6.5 percent this year and measures will be taken to ensure sufficient capital for local businesses.

Hai was speaking at a conference in Hanoi where economists and businesspeople made suggestions on ways to boost economic growth while preventing high inflation.

Vo Quoc Thang, chairman of the Vietnam Young Business Association, said lending interest rates rose 25 percent a year at times, making it difficult for local companies, especially private ones, to take loans. As a result, supply of goods declined and prices surged.  

Chairman of the Vietnam SMEs Association, Cao Sy Kiem, said the government needs to bring interest rates down and boost credit growth reasonably to help businesses.

It's really important for government agencies and localities to coordinate and provide credit to right companies and at the right time, Kiem said.

Luu Duy Dan, chairman of the Vietnam Handicraft Villages Association, which has nearly 12 million workers, said government polices are timely, but it often takes a long time for them to take real effect due to delayed implementation by ministries and agencies.

"The government's stimulus package last year, for instance, was out of reach for 80 percent of businesses in rural areas. I don't know where it has gone."

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