Administrative procedures in the construction sector put the highest financial burden on enterprises, with estimated spending of VND64.1 million (US$2,800) to complete one procedure, said Ngo Hai Phan, director of the Government Office’s Administrative Procedures Management Department.

The Government Office yesterday released a report on Administrative Procedure Cost Index (APCI) 2018, which looks into time and money businesses spend on administrative procedures.

The report came out after two years since the Cabinet took office and aimed to improve the business climate, aiming at boosting domestic investment and attracting more foreign investment.

The report reveals the financial burden that eight groups of important administrative procedures place on enterprises, namely business registration at early start; taxes; investment; business licence and work permit; customs; land; environment; and construction.

It surveyed 3,000 enterprises which conducted administrative procedures in the second half of last year in 63 provinces and cities nationwide

Companies have to pay on average VND12.7 million ($550) on the procedures of the eight groups, according to the report.

The most costly in the construction sector takes 103.9 hours to complete.

The second and third most costly groups belong to environment and investment.

It is followed by business licence and work permit, which the Government regards as top priority of reform.

Spending in customs and business registration at early start and taxes is the lowest.

The cost for a company to complete one business registration procedure is VND720,700 ($31) with the time of 10.5 working hours.

Tax administrative procedures are the cheapest at a cost of VND73,750 ($3.2) and 2.9 working hours.

The report points out a gap of administrative procedure cost in construction sector between localities.

The cost of construction procedures in northern key economic region is estimated to reach VND146.7 million ($6,400), much higher than the average cost of VND64.1 million of the country. Meanwhile, in southern region it costs only VND12.6 million ($550).

The differences, according to the report, are due to different ways of conducting procedures at local levels. For example, spending on business registration in northern Bac Ninh Province is one eleventh of spending in other provinces.

According to study conducted by the Government’s consultative council on administrative reforms, more than 55 per cent of time spent on one procedure is to prepare documents. Some 17 per cent is spent on adjusting documents as required by State agencies. The remaining nearly 30 per cent is on searching for information, applying documents and waiting for results.

Mai Tien Dung, Minister and Chairman of the Government Office, said administrative procedure costs included time, money, direct and indirect, official and unofficial costs.

Enterprises and organisations said these costs remained substantial. Businesses and people still had to spend much time, travel a lot and bear numerous costs.

This year the council had held meetings with associations and enterprises to listen about their obstacles, he said.

"The administrative procedure reform requires drastic and comprehensive measures from central to local level. If the work is well done, the time and costs will be cut and we can eliminate bribery," he said. — VNS