In providing comments on the draft Law on Social Insurance (amended), 13 business associations have called for reduced compulsory insurance contributions, including unemployment insurance premiums.

The employee must currently pay 10.5 per cent and the employer 21.5 per cent of the employee’s salary to the social insurance fund, with 17.5 per cent for social insurance, 3 per cent for health insurance, and 1 per cent for unemployment insurance.

As such, total contributions to the social insurance fund by both the employee and the employer amounts to 32 per cent, which business associations consider too high.

The rate is also much higher than in countries in the region and the world. In Malaysia it is 16.5 per cent, in India 15.25 per cent, in Indonesia 10.26 per cent, in Cambodia 6.1 per cent, in Thailand 5 per cent, in Myanmar 2 per cent, and in Bangladesh 0 per cent. Insurance premiums are mostly paid on the same basis as in Vietnam.

The 13 associations, including in garments and textiles, footwear, and seafood, proposed bringing the mandatory social insurance contribution rates for employees and employers back to 2009 levels, which means the employee pays 5 per cent and the employer 15 per cent.