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Ho Chi Minh City
Wednesday, December 1, 2021

HCMC proposes allowing travel firms to withdraw compulsory deposits

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HCMC – The second wave of Covid-19 has forced travel firms in HCMC to suspend their operations, prompting the city to present a host of policies to support them, including allowing tour operators to withdraw their compulsory deposits at banks.

HCMC is home to 1,200 travel firms, the largest number in the country, 90-95% of which had suspended operations as of August 17, according to the municipal Department of Tourism.

During the first wave of the coronavirus pandemic, most travel firms that tapped international source markets had temporarily stopped their operations, with some even returning their international travel business licenses to get their deposits back, while the second wave of Covid-19 has left major travel firms that operate domestic tours unable to cope with the impact.

As such, the municipal department has written to the Ministry of Culture, Sports and Tourism seeking its approval allowing travel firms to withdraw 50% of their compulsory deposits at commercial banks for one year to maintain their operations.

Under the Tourism Law, travel companies have to deposit VND100 million, VND250 million and VND500 million to obtain permission to operate domestic, inbound and outbound tours, respectively. Besides this, travel firms with a VND500 million deposit are allowed to cover the three travel segments.

Among the 1,200 tour operators in HCMC, over 600 firms have deposited VND500 million at banks.

Many tour operators in the city and other localities are expecting the domestic market to pick up and to resume their operations as soon as Covid-19 is contained.

The tourism sector may face a prolonged drop in the number of visitors in the months to come, while Covid-19, the disease caused by the coronavirus, is expected to be brought under control in late 2020, according to the HCMC Department of Tourism’s response plan.

As a result, the tourism sector is in dire need of financial support so tour operators can restart their operations once the virus is contained.

Apart from its proposal on the withdrawal of deposits, the municipal department also presented other policies, including extending corporate income tax and value-added tax payment deadlines by six to 12 months for tour operators, slashing these taxes by 50% and lowering electricity, water and internet charges.

By Dao Loan

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