Administrative procedures still problems

More than three months since Vietnam officially realised its WTO commitments, the worries of companies about unofficial costs and internal barriers for business still exist.
A recent survey by the Institute for Legal Sciences of the Ministry of Justice reveals that nearly 98% of interviewed enterprises said that the state should continue speeding up administrative reforms.

Two-thirds of them complained that red-tape in land was the most troublesome, followed by formalities in construction licencing (43.3%) and tax (39.5%).

The Hanoi Commercial and Industrial Association has recently made public its survey, in which 89% of interviewed companies said that they still negotiated and went through taxmen though Hanoi initiated the model in which companies declare, pay and take responsibility for taxes themselves on January 1, 2007. Most companies asked for changes in tax regulations.
Many economic and judicial experts expressed their worry about slow administrative reforms at a workshop on administrative and enterprise reforms held in HCM City last Saturday.

Director of the Trade Information Centre under the Ministry of Trade, Pham Tat Thang, recognised that the state had created a good environment for Vietnamese companies and their products to go to the world market in a new position. The local market is open but still retains its stability and helps local companies to raise their competitiveness.

However, according to Mr Thang, looking at the competitiveness between governments, particularly in national administrative reforms, Vietnam has done little compared to the demand of the time and the expectation of businessmen and Vietnamese people.
“When issuing regulations, many ministries still want to intensify their power, not do this for the interests of businesses and the people,” Mr Thang emphasised.

To establish a company, investors still have to go through three ministries, five stages, which take them at least 35 days and over VND3 million. Many rational petitions of businesses are still being considered.

Vice Chairperson of the Institute for Legal Sciences Le Hong Hanh said that the biggest hindrance of businesses was conditional business and licences.

Research by the Vietnam Chamber of Commerce and Industry (VCCI) shows that of 37 types of licences, five don’t have enough and 19 see problems associated with legal foundation.
“This proves that some sectors have created supplementary power for themselves,” Ms Hanh said.

Even when a business wants to go bankrupt, it still has to fulfill a lot of formalities.

Source: VNN