Local firms still face growth barriers

Thursday, Oct 13, 2016 09:15

Representatives meet with authorities to get their businesses registered in Ha Noi. — VNA/VNS Photo Danh Lam
HA NOI (Biz Hub) — Local enterprises face barriers in doing business, and they expect the State to improve the domestic business environment in order to encourage the development of enterprises.

Experts said this at a dialogue on abolishing barriers in doing business on the occasion of Business' Day – October 13 held by BizLIVE online magazine on Tuesday.

At the dialogue, Doan Duy Khuong, deputy chairman of the Viet Nam Chamber of Commerce and Industry (VCCI), said over the last few years, Viet Nam had achieved a high growth rate in gross domestic product (GDP) across the region and the world, but now, growth had began trending downwards.

VCCI has combined with the ASEAN Business Council and Lee Kuan Yew School of Public Policy to rank the competitiveness of countries in the region. The result was not optimistic for Viet Nam, Khuong said, as the financial environment and infrastructure in Viet Nam were weaker than in many other ASEAN countries.

Vo Tri Thanh, former deputy director of the Central Institute of Economic Management (CIEM), said Viet Nam's economy had had many achievements and even more challenges.

In recent years, Viet Nam had undertaken administrative reform, especially in regard to enterprises, to become more transparent and friendly, he said. However, the high transaction cost was one of the reasons that local enterprises could not become larger, because the cost involved would affect the revenue of the enterprises.

Lawyer Truong Thanh Duc, chairman of the Basico Law Company, said there were three factors causing difficulties for local enterprises. They are barriers in doing business, technical standards and administrative procedures. For instance, the Ministry of Industry and Trade should be an agency to actively support the businesses, but the regulations of the ministry have created a lot of barriers, such as those on gas and land. These regulations had prevented small-sized enterprises from entering the market, Duc said.

Huong Vu, Deputy General Director of Ernst & Young Viet Nam, said that existing policies were not consistent with reality. Viet Nam has been undergoing a process of international integration, and many multinational companies have come to the country, but accounting books must still be printed on paper. For a company that performs 20,000-30,000 internal transactions a day, it is impossible for them to store all transactions for a year.

The company had proposed sending soft copies of accounting books to the tax office but the office had not accepted this change, she said.

Meanwhile, Pham Thanh Hung, deputy chairman of Cengroup, said enterprises had often been worried about violating existing regulations and circulars due to their complexity. Therefore, Phi Ngoc Trinh, deputy general director of Ho Guom Garment Joint Stock Company, said local enterprises expected Resolution 35 to solve these difficulties and create a more favourable business environment.

Huong Vu said the Government should reform tax collection activities, if not Resolution 35 would be difficult to implement.

Khuong said the State's relevant offices and the local business community had been compiling the Law on Small and Medium Sized Enterprises to reduce barriers on production and business activities, and give more support to small and medium sized enterprises in their future development. — VNS

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