World Bank calls for more reforms

Vietnam has made considerable progress in the business regulatory environment over the past year but there is still a lot more room for improvement, said the World Bank's vice president of Financial and Private Sector Development Janamitra Devan on Nov. 8.

He was speaking at a workshop titled "Vietnam Business Climate Reforms: Looking forward from Doing Business 2011" in Hanoi.

This progress was reflected by the 10-position-jump from 88 in Doing Business 2010 to 78 in Doing Business 2011 overtaking China to rank 11th in the Asia-Pacific region. Areas that improved the most included starting a business, dealing with construction permits and obtaining credit.

Doing Business, which provides objective measures of business regulations for local firms in 183 economies annually, focuses on regulations relevant to the life cycle of small to medium-size domestic businesses, built on standardised case scenarios.

Devan said Vietnam still lagged behind other economies when it came to effective tax collection, ranking 124 globally.

"Paying tax is a complicated and time-consuming procedure, this area can be pushed to make further improvements," he said.

Devan said despite improvements in other areas, Vietnam
continued to rank in the bottom ten for protecting investors. It was one of two countries that received a zero rating in the extent of director liability index and consequently maintained its position of 173 in the world.

"Making directors liable and allowing shareholders to sue them, addressed in Decree 102, is very new to Vietnam and perhaps we won't see an immediate impact," he said.

The bank's vice president said in the area of starting a business, although Vietnam had jumped 14 positions, its ranking was still quite low.

The new Decree 43 on business registration had helped by enabling online registration but unlike in many other countries, it was still necessary to have registration approved by a Government agency who would then issue a registration certificate.

"The efficiency of Decree 43's implementation would be greatly enhanced if the entire registration procedure could be done online," he said.

Deputy director of the Prime Minister's Special Task Force for Administrative Procedural Reform Ngo Hai Phan said Vietnamwould have received a higher ranking if the survey had been carried out later in the year.

"The survey was conducted between May 2009 and May 2010 while Vietnam started implementing a lot of administrative reforms in June which weren't reflected in this year's Doing Business report."

Phan said that for tax purposes, businesses were allowed to print their own invoices and small and medium-size enterprises only had to declare tax every three months, rather than on a monthly basis as before.

He also said the regulation on the "valid period for construction start-up" in the construction licence had been eliminated, thereby eliminating all the procedures related to the extension of construction licenses.

"These reforms had direct benefits for the business community," said Minister Nguyen Xuan Phuc, Chairman of the Office of the Government.

Phuc said it took time to fully implement the nearly 5,000 administrative procedures because the process involved amendments and supplements to a large number of legal documents.

He called on the business community to continue to cooperate in monitoring the implementation of the administrative procedure simplification plans.

Devan emphasised that the important factor would be how Vietnam move forward further.

Source: Vietnam Plus

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