JCCI tables reform proposal for transparency

JCCI would shape the Vietnamese administrative system to be more like the Japanese model

Efficient use of ODA loans

In recent years, the Vietnamese government has been ramping up loan control measures as the state budget is in chronic deficit and government debt is nearing the 65 per cent of the GDP upper threshold set by the National Assembly.

However, if long-term, low-interest ODA loans continue to be used inefficiently, infrastructure—the foundation for economic development—will remain undeveloped, which in turn may have negative impacts on economic growth in the medium and long run.

Thereby, JCCI agreed with the IMF’s proposals to push core reforms, both from the perspectives of budget revenue and spending and the ability to guarantee financial sufficiency at the earliest possible.

On the revenue side, a policy review is required to move towards expansion and diversification based on tax categories, such as: higher environmental protection taxes, imposing property taxes, increasing excise tax rates, levying and transaction taxes to finance infrastructure projects, and revisiting tax incentives.

On the expenditure side, there is a need to revisit budgetary spending cuts through widening cost recovery or inviting the participation of the private sector in education and healthcare, reviewing the social security coverage in a society entering the ageing phase, promoting administrative reforms, and downsizing in the public sector.

Administrative reform

Despite the Vietnamese government’s proactivity in reforming its administrative system, many foreign enterprises, including JCCI members, have been facing legal difficulties in Vietnam.

Due to ambiguities in the language of ordinances and the arising multitude of interpretations, enterprises are often confused or are unsure of whether they have dispensed with their legal obligations. Besides, enterprises are forced to wait for a long time for an interpretation from the relevant ministries, according to JCCI.

It said that a public administration with such a glaring lack of transparency and certainty may seriously undermine Vietnam’s attractiveness as an investment destination.

At the mid-term Vietnam Business Forum 2017 (in June 2017), JCCI put forward two proposals related to administrative procedures. The first one is to establish a new inter-ministerial organisation with a vested power to deal with interpretation issues. They also proposed developing a regulatory framework and practical procedures through references to the grievance redress system for domestic and foreign businesses established by the Japanese side.

The second recommendation is to enhance procedures for prior confirmation relating to regulations and ordinances in order to prevent emerging issues related to law enforcement. Procedures need to be flawless to allow private sector practitioners to obtain prior confirmation of the relevance of the transactions that they will be engaging in with the ministries in relation to applicable regulations and ordinances, so that they can get answer from these ministries.

JCCI welcomes the strong and passionate efforts of the Advisory Council for Administrative Procedure Reform (ACAPR) to reform administrative procedures, particularly the dialogue between the prime minister and the head of the government office with ACAPR members in next August.

Thereby, JCCI proposes to establish a new organisation under ACAPR called “Professional team,” which would consist of private sector and foreign enterprises. Each chamber of Commerce and Industry would forward their highest priority requests to the “Professional team” which would then come up with concrete plans within a few months. ACAPR would submit these plans to the prime minister, who would discusses it with ministers and make decisions, after fully considering these plans.

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