Insurance tax 2020

BIDV MetLife representatives received an AmCham CSR Recognition Award 2020

In the social distancing period of the COVID-19 pandemic last year, BIDV MetLife received a number of claims for insurance benefits under the circumstances of limited travel and difficulties in the verification process. However, with responsibility and the spirit of always putting clients’ interest first, BIDV MetLife overcame such limitations, quickly collected documents, made claim decisions, and paid for the clients’ families as soon as the paperwork had been completed.

One particular client had an accident and died in May, leaving behind their life partner and two school-aged children. BIDV MetLife had its staff quickly verify the information.

After collating the results, the company decided to pay accidental death benefit as in the contract terms with the aim to promptly help the family stablilise after the unexpected event, and ensure future education for the children.

Another client suddenly died while travelling abroad last year. The customer’s insurance contract did not specify the beneficiary – luckily, the client purchased life insurance from BIDV MetLife. After receiving the case, BIDV MetLife’s Benefit Department helped the client’s family complete the estate division agreement so that they could take advantage of the benefits as claimed in the contract.

Over the last six years, BIDV MetLife has paid almost VND36 billion ($1.56 million) in insurance benefits. In 2020 alone, BIDV MetLife successfully resolved 5,790 cases, paying around VND25.2 billion ($1.1 million).

Since its establishment in 2014, the top priority and mission that BIDV MetLife has pursued is to strive to bring the best for customers, and ensure customer service quality in any and all circumstances.

Not only focusing on taking care of and ensuring customer benefits, since entering the Vietnamese market BIDV MetLife has utilised corporate social responsibility (CSR) programmes to contribute to the community’s sustainable development and ensure social security in places where the company operates.

General director of BIDV MetLife Gaurav Sharma shared, “The employees, clients, partners, and the community are our top priorities. We pursue the goal of “always with you, building a more confident future”, and turn this goal into a foundation to build a better and more humane future. Therefore, we always do our best to ensure that customers benefit as well as aiming at sustainable social activities, contributing to creating positive change for Vietnamese people.”

BIDV MetLife has coordinated with BIDV branches in various provinces to jointly implement initiatives for the community such as awarding scholarships, gifting bicycles to underprivileged students who had made great efforts to achieve excellent academic, presenting new facilities for schools, and much more.

As a joint venture between MetLife Co., Ltd. (belonging to MetLife, the US’ leading life insurance corporation with 150 years of operation) and leading Vietnamese lender BIDV, BIDV MetLife participates in various CSR activities in the country with the budget mainly stemming from MetLife Foundation.

Since 2017, the Foundation in collaboration with partners including Trick up, Plan International, Habitat for Humanity, CEP, Room to Read, and the Special Olympics have supported $5 million through 10 initiatives and projects related to comprehensive finance.

Responsible to the utmost, BIDV MetLife has been honoured with a Corporate Excellence Award by Enterprise Asia – the leading non-governmental organisation on the continent in entrepreneurship – for pursuing the mission of providing the best service to customers, even in tough times like the current pandemic.

In addition to that, BIDV MetLife won the American Chamber of Commerce in Vietnam CSR Recognition Award 2020 in Hanoi last December. This was the fourth consecutive time that BIDV MetLife was bestowed the honour.

Dinh Quang Hinh, analyst at VNDIRECT Securities JSC, noted that the local economy’s recovery “will slow down”, especially in the next two months. According to Hinh, the tourism industry may still be the most affected by the new COVID-19 wave.

Reports from travel and airline businesses showed that many travellers cancelled flights and hotel reservations, and postponed their plans. In addition, the blockade in some localities such as Hai Duong province and the closure of a number of non-essential services in other cities and provinces may reduce the growth rate of several service sub-sectors, especially accommodation, catering, tourism, and entertainment.

At a cocentrated quarantine area. Photo: VNA

Unfeasible policies

Facing the serious impact of COVID-19 on the economy, Assoc. Prof. Dr. Pham The Anh, chief economist of the Institute for Economic and Policy Research (VEPR), said that the country could not pursue macro policies in the same way other countries would do, for example through large-scale monetary easing, due to limited financial resources after years of deficits, coupled with constraints to inflation and exchange rate targets.

Vietnam was one of the few countries in the world with positive economic growth in 2020. But this year, according to Anh’s observation, “the policy space is no longer wide” to support economic growth and social security.

Last year, the State Bank of Vietnam lowered interest rates three times and supported commercial banks with a VND250-trillion package ($10.87 billion), which is still being deployed. In addition, pandemic prevention and social backup subsidies to ease the impacts of the crisis are also putting great pressure on the budget balance.

In 2021, monetary policy, particularly interest rate tools, will see a significantly reduced effectiveness, according to the VEPR’s chief economist.

Anh also warned about an asset bubble that is forming in the stock and real estate markets. Last year, property market saw significant growth, mainly because real estate represented a haven for investors’ idle money.

When price increases on asset markets are large enough to create a wealth effect, consumption increases on non-essential goods could lead to a spillover of increased prices from the asset to the consumer market and, albeit slowly, manifest a rise in prices as the loosening policy is pursued for a long enough time.

The latest VEPR report from February 9 also identifies that the top priority at this time is ensuring social security, keeping macroeconomic stability, and reducing the burden for businesses. Policies to support these also need to continue to be implemented with a higher concentration and more substance, aiming for the right audience and their actual needs.

As such, the report suggested that financial burdens for businesses like loan interests and land rents should be frozen or suspended for the time being, in addition to considering cutting trade union fees to support businesses.

According to the VEPR, the group of businesses that was not affected by the disease or had seen an effective transformation should be encouraged with credit, the right institutional environment, and sectoral policy. These policies should be driven in a way that stimulates demand and assists consumers to pay for products and services, instead of directly sponsoring the company.

“We believe that tax extensions and reductions, if any, should only be applied to VAT instead of corporate income tax (CIT),” Anh said, further explaining that the reduction of CIT only supports a small number of businesses that is either not affected or even benefits from the pandemic. The CIT reduction also risks creating deeper inequality in the business environment, adversely affecting the economic recovery.

Cautious optimism

This year will be the first of the new leadership of the Party and government and is expected to see many new steps, policies, and specific actions for the socioeconomic development. International developments such as the new US president and possibly more predictable policies could make the international environment less uncertain.

However, the continued competition between the United States and China does not protect from new risks that could appear. In this context, the chief economist of VEPR said that supply-side policies could be the most useful for Vietnam to reinforce fundamental elements of the economy.

“Macroeconomic stability, particularly inflation, interest rates, and exchange rates, need to be kept stable, which is essential to prepare for the post-pandemic recovery period. The Vietnamese economy is currently in a difficult time, while the return of a tightened monetary policy could lead to further difficulties for businesses,” Anh said.

At this point, even with the pandemic in the country fully controlled, many export-oriented sectors could face long-term difficulties as COVID-19 remains present throughout the world. Anh found that accelerating public investment, especially for key national projects, is a must to support economic growth.

“The division of multiple bidding packages and a more scattered implementation in many localities could create better spread,” he suggested.

At the same time, a reduction of the recurrent spending from the state budget by at least 10 per cent could be done to devote resources and overcome the consequences caused by the pandemic.

According to experts, many shortcomings in operating economic policies have been revealed, so efforts to improve administrative procedures and the business environment should continue to be maintained.

The diversification of import-export markets also needs more attention to avoid heavy dependence on several major economic partners. Despite delays, Vietnam could step-by-step build up fiscal buffers to prevent further economic shocks in the coming years.

On the bright side, Vietnam’s industrial production seems to expand in the first months of the new year. According to the General Statistics Office, although the industrial production index in January decreased by 3.2 per cent compared to the previous month, it increased by 22.2 per cent over the same period last year.

Meanwhile, the purchasing managers’ index in January decreased slightly to 51.3 from 51.7 points in December but remained above the 50 points level.

Optimistic but cautious, VNDIRECT’s Hinh expected that the manufacturing sector will be less affected by this COVID-19 surge as the global economy could recover stronger in the coming months, thanks to vaccines and more incoming orders for products made in Vietnam.

More time will be needed to observe and quantify the potential impact on the economic outlook, but Vietnam’s macroeconomic foundation may continue to be strengthened backed by current account and trade surpluses, rising foreign exchange reserves, and decreasing inflationary pressure.

At last week’s government meeting on deploying key tasks and activities against COVID-19 after Lunar New Year, Prime Minister Nguyen Xuan Phuc encouraged the public to use the Bluezone app and implement the 5K principles, as well as ensure safety and prevent disease transmission in schools, markets and supermarkets, hospitals, and business establishments, especially those with large numbers of people. “We need to be fully determined, more and stronger than ever before. We must be determined to organise the effective implementation of the resolution of the 13th National Party Congress in each and every locality,” the prime minister said, emphasising the success in the past five years, especially in 2020, when the power and will of the Party were convincingly demonstrated. He stated that focus must lie on directing and handling the five major balances in national development in the next five years. Firstly, there must be a balance between opening up, innovating, and promoting socioeconomic development while strengthening and enhancing the leadership of the Party and a stable development between market laws and socialist orientation, as well as between state, market, and society, between economic growth and human development, between social progress and environmental protection, and between independence and integration. Secondly, it is necessary is to balance rapid economic development with socially equitable progress, including preserving the environment and protecting the national cultural identity. “For example, like with our pandemic prevention efforts, development must be associated with the lives of the people and balanced and harmonious, letting no person and no locality fall behind, and possibly lose development opportunities,” the PM emphasised. Thirdly, there must be a balance between internal and external forces, between domestic and foreign economies, between internal and foreign trade, between building an independent and autonomous economy with openness and international economic integration. Fourthly, short-term priorities must be weighed against long-term goals. “We must not be subjective and avoid pursuing unsustainable short-term goals,” PM Phuc noted, suggesting that ministries and agencies maintain and firmly believe in the ideals and principles of building a socialist-oriented market economy. Fifthly, national financial resources, public debt, and many other macroeconomic figures must be kept in balance. “Today, we have a good system of macro indicators, but we must ensure it is getting stronger and let next year be even better than last year,” said the prime minister.

The groups include health professionals, the pandemic prevention and fight task force (members of steering committees, people working in quarantining areas, reporters and others), diplomats, and customs and immigration staffs, military personnel, police force, teachers, and the elderly aged over 65.

Others include those working to maintain the supply of essential services such as aviation, transportation, tourism, electricity and water supply, as well as people with chronic diseases,people going abroad on a mission, to work, or study, and those in pandemic-hit areas.

The Ministry of Health (MoH) has announced the plan on the reception, preservation, distribution, and use of COVID-19 vaccines during 2021-2022 with the support of the COVAX Facility – the global procurement mechanism of COVAX.

Vietnam aims to have 80 per cent of its population get vaccinated against COVID-19. However, due to the limited supply, the rate can hit 20 per cent in 2021-2022.

COVAX is co-led by the Coalition for Epidemic Preparedness Innovations (CEPI), GAVI – the Vaccine Alliance, and the World Health Organization (WHO), alongside key delivery partner UNICEF. Its aim is to accelerate the development and manufacturing of COVID-19 vaccines and to guarantee fair and equitable access for every country in the world.

The COVAX Facility aims to supply COVID-19 vaccines to 190 countries worldwide. On December 10, 2020, GAVI named Vietnam as a member nation. GAVI and COVAX Facility expect to provide COVID-19 vaccines for 20 per cent of the population of member nations.

In spite of this, it is currently estimated that the COVAX Facility will provide the vaccine and materials for vaccination free of charge for 15-16 per cent of the population of 92 countries, including Vietnam. On January 29, the COVAX Facility said that more than 4.8 million doses of COVID-19 vaccine produced by AstraZenecca will be delivered to Vietnam in the first half of this year, while the next delivery will be announced later.

As planned, around 600,000 Vietnamese people, comprising healthcare and COVID-19 combat workers, will be given shots in the first quarter. Meanwhile, 1.8 million customs officers, diplomats, army and police personnel, and teachers will be injected in the second quarter. During the second half, over 16 million teachers and people above 65 will access 33 million doses of vaccines to be provided by the COVAX Facility later.

At a recent online meeting with cities and provinces, Health Minister Nguyen Thanh Long said that in 2021 Vietnam will 150 million doses of the vaccine to ensure sufficient supply. The COVAX Facility has committed to supply 30 million doses for Vietnam this year, mainly used for the remaining six months of the year. AstraZeneca also committed to supply the same doses.

Vietnam stepping up vaccine activities While pushing ahead with locally-made vaccine trials and production, Vietnam is calling on private involvement and resources to quickly increase COVID-19 vaccine supply amid the …

Vietnam to import first batch of Covid-19 vaccine (Infographics) The Drug Administration of Vietnam has approved the import of the first 204,000 doses of the Oxford/AstraZeneca COVID-19 vaccine for emergency use.

PM requests purchasing COVID-19 vaccine in February Prime Minister Nguyen Xuan Phuc has ordered the health sector to conduct all necessary measures to make COVID-19 vaccines available in Vietnam this month either …