22
Insurance policy: there is no specialized
disaster risk insurance product in the insurance
market in Viet Nam. Disaster riskis the extended
terms and conditions in a property insurance
policy, personal insurance policy or agricultural
insurance policy.
Regarding the state assets insurance, the Law
on Management and Utilization of Public Assets
adopted by the National Assembly in June 2017
proposed a provision required public assets of
certain categories must be insured. According
to the Public Asset Management Department
(Ministry of Finance), there are about 1,000
organizations in Viet Nam have purchased
insurance for their public assets with a total
premium of VND 180 billion.
Regarding the agricultural insurance, up
until middle of 2016, there were 304,017 farmers/
organizations purchased agricultural insurance
with total insured value of VND 7,747.9 billion.
In addition, there are a number of other
financial solutions against natural disasters
such as financial mobilization from community
through the Viet Nam Fatherland Front and
the Red Cross Association, loans and financial
assistance from international organizations such
as Asian Development Bank, the World Bank or
Japan International Cooperation Agency, and
preferential credit from Viet Nam Banks for Social
Policy and Vietnam Bank for Agriculture and
Rural Development.
Challenges for financial inclusion
To be considered as a driving force for
sustainable growth and poverty reduction, the
need for inclusive finance keeps increasing,
especially in developing economies. However,
during the implementation of financial inclusion
in the region, a number of challenges have been
identified:
Firstly,
limiting access to microfinance makes
micro and small businesses and individuals
difficult to make plan and conduct savings,
payments, loans and risk management efficiently.
Individuals and households are limited in the
ability to overcome economic shocks, to manage
their saving, consumption, investment and risk
management effectively. Newly-established
enterprises are dependent on their limited profit.
the value of losses due to natural disasters. The
Law on Personal income tax seeks to reduce
taxes in case taxpayers encounter difficulties due
to natural disasters affecting their ability to pay
taxes. The Law on Agricultural land use tax and
the Law on non-agricultural land use tax provide
tax exemption or reduction of agricultural and
non-agricultural land use, depending on the
severity of the damage. The Law on Royalties
specifies that natural resource tax payers shall be
considered for exemption or reduction of payable
tax on natural resources lost due to natural
calamities. The Law on Excise Tax stipulates tax
reduction for taxable objects in case of natural
disasters. Besides, export and import goods for
recovering the consequences of natural disasters
are also exempted from custom tariff.
Policies on off-budget funds: there are a
number of off-budget funds operating for various
purposes, including prevention and recovery from
natural disaster. The Fund for Disaster Prevention
and Control established under the Law on
Natural Disaster Prevention and Control in 2014,
is under the control of the provincial People’s
Committee. The Fund is attributed by local and
foreign economic units in the locality, people in
the working age and other legal sources including
donations, voluntary contributions. By June 30,
2017, there have been 50 out of 63 provinces have
set up the Fund Management Office; 13 provinces
have been preparing and submitting to provincial
people’s committee for setup decision; 37 out of
50 provinces have collected Fund’s revenue with
the total revenue of VND 812 billion.
The Road Maintenance Fund which was
established under Decree 18/2012/ND-CP, with
revenue from road maintenance fees and budget
allocations can be used to repair roads damaged
by natural disasters. By 2015, the fund accounted
for VND 6,381 billion, of which the road
maintenance fee was VND 3,067 billion, budget
allocation was VND 3,100 billion and VND 214
billion was transferred from 2014 budget balance.
In particular, the total expense for repairing roads
was VND 473 billion for the year 2015.
In addition, the Environmental Protection
Fund, established in 2002, also provides financial
support for environmental protection and
response to climate change.
