Economist and entrepreneurs name shortcomings

Poor tax and land policies are stymieing the growth of private enterprises in Vietnam, a conference in Ho Chi Minh City heard Monday.

At the meeting attended by economists and entrepreneurs, Huynh Thi Kim Huong, director of the city-based ISC, a commodities distributor, said the opaque tax policies caused many difficulties for companies.

Her company, for instance, paid 3 percent, 10 percent, and 20 percent import tax on shuttlecock but on an ad hoc basis; there were no fixed tariffs.

Initially ISC had paid 5 percent. Later the rate had been raised to 10 percent without any explanation from customs. If her company contested the arbitrariness, it was slapped with a 20 percent rate.
The opaque tax regime enabled customs officials to get bribes.

Dinh Van An, head of the Central Economic Management Research Institute, concurred saying the tax policies were vague.

There were 14 kinds of tax-deductible fees but they did not include commission and brokerage, causing confusion.

The government intervened too much in businesses’ activities: For instance, salaries paid by the private sector could not exceed those paid by state firms in the same sector.
It was necessary to have an open financial mechanism to provide private firms more rights in determining their financial activities.

Chen Li Hsun, chairman of Taiwanese-owned Full Power Joint Stock Company, said inappropriate land policies caused problems for real estate firms.
Official rates set by the government were too much at variance with market rates.
Another problem was that state agencies wanted firms to submit firm proposals before fixing the land price. But investors needed to know the price to finalize their plans.
Tran Ngoc Lan, deputy head of the National Committee for Ideology and Culture in the south, admitted that non-state firms were yet to get tax, finance, and land use privileges because to red tape.

Foreign experts said commercial banks ignored private firms, particularly small and medium ones, since they mostly targeted big companies.

Source: VNA