Vietnam makes giant stride in business climate improvement

The progress in Vietnamese business climate has been recorded in the World Bank’s Doing Business reports for many consecutive years, as seen in the country’s rising in the rankings of market participation, business establishment, electricity access and tax registration.

According to Nguyen Thi Minh Thao, head of the Central Institute of Economic and Management CIEM’s Business Environment and Competitiveness Department, Vietnam’s position in the WB’s Doing Business rankings have improved remarkably, from 78th position in 2014 to 68th in 2017 and 69th in 2018. She added that despite dropping one place in 2018, Vietnam’s overall score increased 1.59 points, and its net score had improved in eight out of 10 categories.

However, the country had failed to reach the average standards of the top four countries in the Association of Southeast Asian Nations (ASEAN) in terms of business environment, Thao said, explaining that there remain many irrational business conditions, and the management system is still cumbersome.

Hailing the Vietnamese Government’s efforts in administrative reform and investment attraction, Mark Gillin, Head of Tax & Customs of WB Working Group, said that more work should be done to better the implementation of tax and customs policies, which have big impacts on businesses’ decision to make investment or expansion in Vietnam.

He suggested the Government be more transparent in tax and custom policies.

Sharing the same viewpoint, President of the Vietnam Chamber of Commerce and Industry Vu Tien Loc said that instead of relying on direct interference in the form of documents or tax measures, the Government should use its policies to orient the market and promote the development of companies, especially the small-and medium-sized enterprises. In the long term, policy initiatives will bring more sustainable outcomes than financial interference measures, he said.

The Government on January 1, 2019 issued Resolution No 02/NQ-CP replacing Resolution 19, setting targets for improving business environment and national competitiveness for 2019 through to 2021. It replaces. The renumbering of the resolution demonstrated the Government’s priority in fostering the quality of Vietnam’s business environment.

The move aims to realise the target to get Vietnam into the top four countries with the best business environment in ASEAN by 2021.