Vietnam efforts to improve business environment show mixed results

The Vietnam Chamber of Commerce and Industry chairman said the business community appreciated the Government’s reform efforts in the past year, which resulted in two bright spots: administrative reform with 50 percent reduction of business conditions and initial efforts in ushering in e-governance and digital economy.

However, the results have not been as expected, Loc said at the 2018 Vietnam Business Forum (VBF) held recently in Hanoi,

According to a VCCI survey, as of September this year 58 percent of businesses applied for conditional business licenses, with 42 percent of them saying they had difficulties. Only 13 percent of registrations were applied online.

The tax payment process has been somewhat streamlined, mainly due to the use of information technology, but the tax laws remain unclear, causing inconsistent interpretation by enterprises and tax authorities.

The one-stop-shop mechanism is being established in some places. Dialogues between provincial governments and enterprises are also being organized. Concepts like co – working space and ‘business coffee shop’ have been introduced in many localities to connect local authorities and business people and enterprises with each other to exchange ideas and experiences.

But these models have not become popular yet or achieved any great change. The rate of enterprises being audited twice or more in a year is still 40 percent.

Inside a Samsung smartphone factory in Vietnam.

"These figures show that the business environment has improved, but there are still many obstacles and the gap between authorities’ reports and reality is big," Loc said.

To continue improving the business environment and promoting business development, VCCI leaders proposed a number of solutions to the government such as paring conditions for business investment and simplifying administrative procedures.

Besides, VCCI representatives also offered suggestions to improve transparency at ministries with respect to inspections and information.

Though Vietnam has taken many measures to improve its business environment, the results have been below expectations. It needs to improve its business environment more quickly, especially in the context of its new free trade agreements, if it does not want to fall far behind the leading ASEAN economies.

"We support the government's aggressive reform programs, with two key cutting-edge administrative procedures and e-government," Loc said.