Ways to improve VN business climate
(VOV) -Vietnam should further improve its business environment, including simplifying administrative procedures and cutting business costs, or it lags behind other countries, local and foreign experts suggested.
Addressing a seminar in Hanoi on July 31, Olin McGill from the United States Agency for International Development (USAID) hailed the Vietnamese government’s resolution 19/2014, showing its great effort to improve the country’s business environment.
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This is an influential reform package aimed at making the business climate better and increasing the economy’s competitive capacity, he said.
McGill, a consultant for the USAID-funded Governance for Inclusive Growth (GIG) Programme in Vietnam, quoted a recent World Bank report as saying Vietnam ranks 99/189 in terms of Ease of doing business index.
With such a position, the country’s per capita income should be US$7,545, much higher than its current US$1,400, he said.
Another area McGill suggested Vietnam should focus on is simplifying income tax compliance procedures. He pointed out the fact that each enterprise in Vietnam currently spends on average 872 hours a year completing and complying with tax procedures, while the average figure worldwide is only around 300 hours.
Furthermore, he said, cross-border trade is rife with shortcomings resulting in waste of at least 15% of Vietnam’s total trade turnover.
Dr. Nguyen Dinh Cung, Director of the Central Institute for Economic Management (CIEM), in turn said his institute is working closely with the business community seeking common measures to help Vietnam overcome challenges in improving its business environment and sharpening the competitive edge.
Currently we are targeting for Vietnam to rank among the top six ASEAN members having good competitive index within the next few years, he said.
Vietnamese agencies are required to trim administrative procedures and business costs in three key areas of cross-border trade, tax and electricity access, as suggested by the World Bank.
At the seminar, the General Department of Taxation, Vietnam Customs and Electricity of Vietnam (EVN) vowed to improve the three indices from now till 2015.
To make the reform a great success, CIEM and USAID/GIG representatives said they will work closely with trading associations to map out a practical plan of action.