Labour-intensive sector insiders are
skeptical whether a recent government support package will hit the mark.
Ho Chi
Minh City Leather and Footwear Association general secretary Nguyen Van Khanh
said the support, via corporate income tax (CIT) tax reductions and extensions,
could fail to help the footwear sector as most firms saw export orders fall
30-40 per cent and their CIT amounts would not be large.
“We
will sit with enterprises to listen to their needs and concrete proposals
relevant to the government support package,” Khanh noted.
Thien
Nam Textile Garment firm director Nguyen Dang Chuc said textile and garment
firms need more attention as it was a labour intensive industry.
“It
would be most practical for firms if the government applied tax incentives like
in 2008 when it halved value added tax (VAT) to 5 per cent,” said Chuc.
Vietnam
National Textile Garment Group deputy director Le Tien Truong said the CIT
reduction would only help profitable businesses.
Truong
said a six-month VAT payment extension could help firms concentrate more on
production. However, stepping up production amid dwindling consumption would be
unwise.
Textile
garment firms said they wanted lower VAT rates to kick up consumption and drain
unsold stock.
“Though
domestic market is in difficulty, most of our firms have orders in export
markets, hence there should be a specific package to help firms weather the
storm,” Vietnam Textile and Apparel Association deputy chairwoman Dang Phuong
Dung said.
In
fact, escalating input costs in previous months made locally-produced materials
and accessories more expensive than imported ones. Hence, from early this year
many foreign partners shipped materials to Vietnam for local companies to
perform export processing. This has cast a remarkable dent on firms’ profits,
while local material producers saw rising inventories.
Industry
insiders assumed alongside expectations for lower VAT rates further easing the
interest rates would be the most substantial support for firms in current
context.
Vu Hai
| vir.com.vn
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