Anti-corruption efforts helping cut informal business costs
The Government’s anti-corruption efforts have proven increasingly effective, helping enterprises significantly reduce informal costs, according to the Vietnam Chamber of Commerce and Industry (VCCI).
The Provincial Competitiveness Index (PCI) 2020 report conducted by VCCI shows that the rate of companies forced to pay informal charges fell to 44.9% from 66% in 2016, the lowest proportion since 2006.
The amount of informal charges paid has also dropped significantly over time, as only 5.4% of enterprises reported they spent over 10% of revenue on informal fees, down 3.7% compared to the figure in 2006.
Dau Anh Tuan, head of the VCCI’s Legal Department, said the burden from informal costs has been steadily declining, as 84.4% of enterprises consider them to be at an acceptable level.
Most businesses said the majority are for land-related administrative procedures, inspections, import and export activities, or the bidding process.
More than 2% of foreign-invested enterprises said they had to spend 10% of their revenue on informal charges in the 2016-2017 period, which was down to 1.2% in 2020.
According to the report, 41% of enterprises plan to expand their business in the next two years, down significantly from the 51% reported in 2019.
Meanwhile, up to 13% said they will scale down or even cease doing business - the highest level since VCCI began compiling the PCI.