Expectations for accelerated improvement of the business environment

Enterprises always expect drastic and thorough business environment reform. Photo: H. Duu

Continual reform

For eight consecutive years, the Government has annually issued a Resolution on the main tasks and solutions to improve the business environment and national competitiveness (Resolution 19/NQ-CP in 2014, 2015, 2016, 2017, and 2018, and Resolution 02/NQ-CP in 2019, 2020, and 2021), focusing on improving the business environment index, specialized tests, business conditions, digital transformation, and startup ecosystem. Thanks to the implementation of these resolutions, Vietnam's business environment has improved. Compared to the period 2011-2015, Vietnam has increased 20 places on the World Bank's Business Environment Ranking, ranked 70th; and increased 10 places on the IMF’s Global Competitiveness Ranking 4.0.

For the business community, the improvement of the business environment has been shown clearly. According to the report on “Vietnam’s business environment reform program: Perspective from enterprises” announced by the Vietnam Chamber of Commerce and Industry (VCCI) recently, showed that improving the business environment and supporting businesses were conducted vigorously. In which, registration for business establishment is highly appreciated by Vietnamese firms. Total time spent on business procedures has halved over the past six years. Business registration has been reduced from 12 days to six, and business re-registration procedures have been reduced from seven to 3.5 days.

Tax declaration and payment was also one of the issues that received many positive reviews from businesses. Regarding tax inspection, the VCCI’s survey showed that the average time that an enterprise needed to meet tax officers in 2020 was eight hours, which was much lower than 19.5 hours in 2019.

Import and export of goods also reached significant improvement over the years, mainly thanks to tthe application of information technology, risk management, integration of administrative procedures, and reduction and transparency of specialized inspection.

Import and export of goods also reached significant improvement over the years, mainly thanks to the application of information technology, risk management, integration of administrative procedures, and reduction and transparency of specialized inspection.

Reform level up

According to a VCCI’s report, the Covid-19 pandemic and the last year of its term made measures to improve the business environment and to support businesses in 2020 somewhat slow down.

According to experts, the business environment has many obstacles to businesses, such as: inadequate business conditions at the law level; overlapping, unnecessary, non-transparent business conditions or deeply interfering with corporate self-determination; slow changes in specialized inspection; ineffective OSS mechanism when businesses still have to submit paper copies; lack of connection between ministries; and congested information technology system.

Regarding unreasonable policies, a representative of Sam Ran Co., Ltd. said according to the provisions of Circular 03/2020/TT-BKHCN of the Ministry of Science and Technology, raw materials were not subject to inspection. However, in early 2021, according to the provisions of Decision 3115/QD-BKHCN, when importing raw steel, enterprises must carry out procedures to invite an inspection agency to check the steel mark. However, there is no national standard for this item, so the inspection center requires enterprises to present the foreign standard and tests whether the product conforms to the standard. This person said this was an unreasonable and costly job for businesses.

Additionally, many businesses said administrative procedures in the construction sector had not improved as expected. The most difficult procedures include land, land clearance, construction planning, urban planning, and decision on investment policy. Informal costs have been the biggest problem. Concerning procedures related to land, the fact that time limit for handling dossiers is longer than the regulations; A VCCI survey showed that many businesses had to cancel their production and business plans due to these problems.

In the court field, Lawyer Nguyen Nguyen The Truyen, Director of Thien Thanh Law Firm, said there was uncertainty in digital transformation when performing administrative procedures in court between State agencies and localities. Regarding dispute resolution, 400 days was too long to settle under the Law of Procedure. However, the Law on mediation and dialogues at the Court have provided more procedures. Accordingly, firms must file an application to themediation center in court, which means an additional two months of handling a case. Truyen said this regulation went against the policy of shortening time in reforming the business environment.

Difficulties related the business environment faced by enterprises have been numerous, leaving room for reform. Therefore, businesses and experts said Vietnam's business environment reform in the future must be upgraded, not only removing barriers but also creating a transparent business environment, strengthening market discipline, promoting innovation, and providing stability and predictability.