Business prerequisites still too costly

Thursday, Nov 15, 2018 08:05

Tiles being produced at Prime Pho Yen in Thai Nguyen Province. The Government has issued a programme to cut costs for firms in an effort to improve the business climate. — VNA/VNS Photo Quan Trang

Progress on deregulation of business prerequisites was still much below the goal, requiring greater cost-cutting efforts for businesses, the Central Institute for Economic Management (CIEM) told a conference on Wednesday in Ha Noi.

CIEM estimated there were more than 5,000 business prerequisites in around 400 legal documents.

To date, 542 prerequisites were amended, 771 removed and 111 replaced, but 29 new conditions were released.

Phan Duc Hieu, CIEM deputy director, said the deregulation push failed to meet the Government’s goal of cutting 50 per cent of prerequisites.

Hieu added that many business prerequisites, despite being amended, remained vague and lacked transparency.

“Several removed regulations do not bring any changes,” he said. “Some cause more difficulties for businesses. Deregulation is just a small part. What’s more important is the quality of regulations.”

According to Nguyen Minh Thao from the CIEM’s Business Environment and Competitiveness Committee, unnecessary prerequisites remained popular, hindering business operation.

“Many prerequisites were amended in name only while several were compiled into one document,” he said. “Some were amended but in fact not simplified.”

Dau Anh Tuan, head of the Viet Nam Chamber of Commerce and Industry (VCCI)’s Legal Department, said deregulation still focused on simplification while little attention was paid to completely removing prerequisites.

“The deregulation must create real breakthroughs,” Tuan said.

Tuan added that to improve deregulation, it was necessary to listen to contributions from enterprises.

Experts at the conference proposed an independent organisation to measure the quality of deregulation.

Action programme

The Government issued Resolution 139/NQ-CP on November 9 to introduce an action programme to cut costs for enterprises.

The Government asked ministries and local management agencies to strengthen reforms, especially in cutting unreasonable costs and creating favourable conditions for enterprises.

By 2020, the deregulation in investment, land, construction, tax payments and social insurance should reach the average score of ASEAN+4 in the World Bank’s Doing Business report.

The percentage of firms saying that they must pay informal charges in the PCI report is expected to be reduced by half if the action programme is successful.

The resolution said the business climate in Viet Nam suffered due to unreasonable costs for businesses.

It cited the World Bank’s report about the ease of doing business, saying that Viet Nam’s rankings in several indicators were still much lower than other countries in the region. For example, tax payment and insurance costs for Vietnamese firms accounted for 38.1 per cent of pre-tax profit, compared to 28.4 per cent in Thailand and 30 per cent in Indonesia. VCCI’s provincial competitive index (PCI) report also revealed that 59.3 per cent of firms said they pay informal costs. — VNS

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