Business inspection should be corrected

Controlling business inspections and audits

Speaking at the 2017 meeting between the Prime Minister and businesses, Dr. Vu Tien Loc, President of VCCI, pointed out that the results of a quick survey conducted by the organization at the turn of 2017 demonstrate that 75% of the businesses have positively evaluated the five task lines in Resolution 35/NQ-CP while only 25% of the businesses have not yet felt the impact of the task lines.

He also said that many businesses are facing difficulties, originating from an unfavorable business environment with unsolved obstacles. While good results of the implementation of the resolution are still modest, many weaknesses of the business environment that have been accumulated have not yet been resolved.

Prime Minister Nguyen Xuan Phuc and representative of Vietnam enterprises

“VCCI’s surveys show that  localities have not seriously implemented Resolution 35/NQ-CP, which permits competent agencies to inspect businesses once a year. As a result, businesses have seen 6-7 inspections per year, not to mention unofficial checks or unwanted visits,” said Dr. Loc.

To control business inspections and audits, troubling and tiring businesses and negatively affecting their production and business, and to effectively implement Resolution 35/NQ-CP, the Governmental Office has just sent Official Dispatch to all cities and provinces, VCCI and other involved organizations, correcting business inspection and check to avoid repeated and coincidental inspections and audits.

Particularly, the Prime Minister has assigned the Governmental Inspectorate in coordination with involved ministries and localities to work out a draft directive of the Prime Minister to put business inspection, check and audit activities under control, responding to opinions and proposals from businesses. The Prime Minister has also tasked the Governmental Inspectorate in collaboration with the Justice Ministry and State Audit Office to review and revise or propose to revise legal documents on inspection and audit to avoid repeating inspection and audit activities over businesses, causing troubles to them. All the documents and reports must be submitted to the Prime Minister by the end of the 2nd quarter of 2017.

Creating a favorable business climate

The business climate index (BCI) of EuroCham in Vietnam shows that the degree of optimism about the Vietnamese economy was lower in Q1 of 2017 than 2016 although European companies still had good perspective for the local economy.

67% of the member businesses of EuroCham in Vietnam that participated in the earlier BCI survey rated the local business climate as “Excellent” or “Good”, down by 5% against the previous quarter. Meanwhile, the numbers of businesses rating it as “Not Good” and “Very Bad” represented 9% and 3% in Q1 of 2017, respectively (3% and 2% respectively in the previous quarter).

According to Dr. Loc, the legal framework regulating business activities remains inadequate while administrative procedures are lengthy and heavy in comparison to the international standards, which ties businesses into knots. According to the 2017 World Bank Report, business costs , especially power cost and enterprise taxes in Vietnam are basically higher than in other regional countries, like Malaysia and Singapore. Therefore, it is necessary to reduce costs for businesses though cost reduction is not all.

Recently, the “Tectonic Government” has been frequently mentioned, and the phase has widely been understood only as government’s support and assistance. “But what businesses really need from the government is technical support or support for businesses in improving their business management capacity rather than financial support or direct assistance for their business activities,” Dr. Loc stressed.