State launches resolution to boost business climate

Enterprises have welcomed the enactment of Resolution 35 Photo: Le Toan

The resolution coming out last week states that “An enabling business environment must be created, and enterprises must be the key propellant of the economy”.

Prime Minister Nguyen Xuan Phuc, under the document, ordered that the Ministry of Planning and Investment revise and access the implementation of all enterprise-supporting policies, especially for startups.

Meanwhile, the Ministry of Finance (MoF) was directed to collaborate with relevant ministries and agencies to design a resolution on removing tax-related obstacles for enterprises in 2016.

Under the new scheme, difficulty-hit enterprises will be able to enjoy tax payment deferment, while small- and medium-sized enterprises will be given a reduction in corporate income tax. Notably, the government will give a 50 per cent reduction in personal income tax for those processing farm produce, and those in the IT and hi-tech agriculture sectors.

Additionally, the prime minister required the MoF to combine with relevant ministries and sectors to revise all documents and policies to minimise business costs in favour of enterprises. The costs are incurred chiefly in the fields of land acquisition and transport.

The Vietnam Chamber of Commerce and Industry will have to clarify unofficial and official costs facing enterprises. In addition, companies must be given due notice of all inspections and audits.

Nguyen Minh Khanh, general director of a pharmaceutical firm in Ho Chi Minh City, told VIR that she expected the government’s resolution to be put into practice, so that firms like hers could “live peacefully”.

“To establish a small-sized pharmaceutical firm now, you would have to pay an unofficial cost of dozens of thousands of dollars,” Khanh revealed, adding that it was also very hard for firms to seek permission from the authorities for them to register and distribute a new drug in Vietnam, even though the firms’ proposals were in line with the law.

Nguyen Ton Quyen, chairman of the Timber and Forest Product Association of Vietnam, told VIR that it would often take months for an investor to be licensed. “Many wood processing firms are suffering from serious shortages of capital. But it would be hard for them to have a bank loan due to the very complicated procedures.”

He hopes that if the resolution is effectively implemented, enterprises in Vietnam will be spurred on towards greater successes. However, this optimism is tempered somewhat by present realities, “we will have to wait and see”, Quyen added

Mikio Masawaki, general director of Sapporo Vietnam, commended the Vietnamese government’s efforts to improve Vietnam’s investment climate. He, however, added that the country’s policies must be made more transparent, and that it was important for investors to be updated quickly and correctly of such policies.

Meanwhile, Yasuzumi Hirotaka, chief representative of the Japan External Trade Organisation, said that in Vietnam, “the implementation of solutions” is more important than the “announcement of reform”.

“People in charge of governmental services, such as the tax and customs authorities, which are the weakest points of the Vietnamese administration system, should be re-educated in terms of knowledge and ethics. Meanwhile, provincial leaders must simplify procedures as well as manage these terminal organisations to boost transparency and reduce the instability in the implementation of systems,” Hirotaka said.