Scoring 9 months of breakthroughs in improving the business environment

Resolution on improving the business environment and enhancing national competitiveness, issued by the Government on March 18, 2014, requires focusing on effectively implementing 3 strategic breakthroughs associated with restructuring the economy and transforming the growth model.

In particular, the 2014-2015 period focuses on improving the business environment, promoting administrative procedure reform, shortening processes, reducing time and costs of implementing administrative procedures, ensuring transparency and enhancing the responsibility of state administrative agencies. The resolution requires that by the end of 2015, a number of indicators will reach the average level of the ASEAN-6 group of countries.

The resolution proposes 7 overall solutions and 49 specific solutions for ministries, agencies and localities.

The Government Report of the Ministry of Planning and Investment said: Of the 7 overall solutions, 4 have been implemented and have initial results; One solution has been implemented but there are no clear results; and 2 solutions have not been implemented yet.

Of the 49 specific solutions, 8 were implemented and had results (accounting for 16.3%); 16 solutions have been implemented but have not yet had clear results (accounting for 32.7%); and 25 solutions have not been implemented (accounting for 51%).

Raise a series of indexes

According to Minister of Planning and Investment Bui Quang Vinh, carrying out the task of reviewing and completing legal regulations on improving the business environment and enhancing national competitiveness, the Investment Law and Enterprise Law have closely followed the requirements of the Resolution.

With the goal of enhancing the effectiveness of protecting the rights and interests of investors and shareholders, the amended Enterprise Law has ensured the principle of fair treatment among shareholders, better protecting the legitimate rights and interests of shareholders. Accordingly, Vietnam's "investor protection" index ranking is expected to increase to position 52 compared to position 157 (according to Doing Business 2014).

In order to simplify business start-up procedures, the Enterprise Law has reduced it to 5 procedures with a duration of about 5 days (instead of 10 procedures with 34 days as before), of which the business registration time is 5 days (1 day less than the requirements set out in the Resolution). With the above change, "starting a business" in Vietnam will be significantly improved, expected to increase by 50 rankings from position 109 to about position 60.

Regarding tax payment time, Resolution 19 requires simplification and reform of tax payment processes, records and administrative procedures, shortening tax payment time to 121.5 hours (currently 537 hours). With a series of solutions in Circulars, Decrees and Laws issued by the Ministry of Finance, Government and National Assembly, it is expected to reduce about 370 hours to 167 hours.

Vietnam Social Insurance is responsible for reducing social insurance payment time to 49.5 hours (currently 335 hours). Vietnam Social Insurance has issued documents in the direction of reducing the time to prepare documents as well as the interaction time of people and businesses with insurance officials, building software to declare documents to participate in social insurance and health insurance online; Draft decision on pilot electronic transactions... It is expected that the Social Insurance will shorten from 263 procedures to 111 procedures and reduce the number of business transaction hours by 50% compared to today.

With the above reforms, it is expected that Vietnam's "tax payment" index (according to the WB's assessment, including payment of social insurance) will increase from position 149 to about 134.

Regarding the time to access electricity, currently 115 days, Resolution 19 requires shortening it to a maximum of 70 days. The Ministry of Industry and Trade (EVN) has a plan to shorten the time to carry out power supply procedures for medium voltage transformer stations to 18 days (according to current regulations is 60 days). According to EVN's recommendations to relevant agencies, the total time for implementing procedures for medium-voltage power grid projects will be shortened to 37 days (lower than the requirements of the Resolution). It is expected that Vietnam's position on the "access to electricity" index will increase from position 115 to position 111.

The report of the Ministry of Planning and Investment also specifies some solutions that have been implemented, but there are no clear results.

In particular, worth noting are solutions to reduce customs clearance time to 14 days for import and export goods and 13 days for imported goods (currently 21 days). The biggest problem currently in customs clearance of import and export goods is specialized management procedures (accounting for 72% of customs clearance time), associated with the responsibilities of many different ministries and agencies.

Therefore, although these solutions have been actively implemented by the Ministry of Finance, they have not brought clear results. A number of ministries and agencies have implemented solutions, but most of the solutions have not had clear results.

In particular, the Report of the Ministry of Planning and Investment also frankly admitted that some solutions have not been implemented. Notably, solutions related to the Bankruptcy Law to reduce the time for processing insolvent enterprises to a maximum of 30 months (currently 60 months). The reason is that the Bankruptcy Law was just passed by the National Assembly on June 19, 2014 and took effect from January 1, 2015.

There are still many ministries, agencies and localities that have not actively developed or not closely followed the targets and ways to improve the business environment according to international practices. In particular, there are 5 ministries that have hardly implemented any of the assigned solutions.

The Ministry of Planning and Investment commented that overall, although there are still many solutions that have not been implemented, the key tasks set out in 2014-2015 have largely been implemented and yielded results. It is expected that Vietnam's overall ranking will increase to 56th, compared to 99th in the report published by the World Bank in October 2013.