After the pandemic is gradually put under control in many provinces, local authorities and businesses are striving

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After the pandemic is gradually put under control in many provinces, local authorities and businesses are striving to get the economy back to normal. However, for businesses, to resume operation, capital for production is one of the most important issues besides the shortage of labourers. In the new context which requires rapid restoration of production, they are facing a lot of challenges ranging from the shortage of labourers, supply chain disruption, increases in input material prices and especially shrinking cash flows.

To quickly put the economy back on track, the Party and Government has issued and supplemented many policies to support labourers and enterprises. Recently, banks are also being flexible to consider unsecured loans based on cash flow management and continue improving the lending process and procedures to shorten the loan approval time. Meanwhile, the central bank has signalled that it will continue promoting solutions to remove difficulties for borrowers hit by the pandemic and concentrate capital to promptly meet the demand of the economy at reasonable terms and interest rates.

Besides banks, SMEs can access capital from funds, such as the Small and Medium Enterprise Development Fund (SMEDF) under the Ministry of Planning and Investment which provides funds for innovative start-ups, SMEs, enterprises participating in industry clusters and value chains. According to Mr. Bui Hoang Tung at the fund’s loan operations division, the fund is working with experts to help SMEs improve their business capabilities, reduce risks and aim for sustainable development. The fund will advise and assist businesses in doing loan procedures and early repayment is free.

Besides loans, the Ministry of Finance has advised the Government to reduce corporate income tax, VAT, personal income tax and waive fines for late tax payment for businesses facing difficulties. This total support package is about VND21.3 trillion ($926 million).

Fiscal measures such as extension of loan payment and insurance premium payment, corporate income tax reduction, exemption of fines on late payment cannot help businesses recover immediately, but they will provide a solid support, helping businesses save more cash to maintain production and recover.

Source: Vietnam News, as retrieved from: https://vietnamnet.vn/en/business/enterprises-call-for-government-support-due-to-lack-of-capital-amid-pandemic-784754.html

Based on the information given, discuss the economic system of Vietnam.