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Vietnam Business Forum overshadowed by tax, customs grievances

Wednesday, December 02, 2015, 17:20 GMT+7
Vietnam Business Forum overshadowed by tax, customs grievances
(L-R) Vietnam's Minister of Planning and Investment Bui Quang Vinh, Vietnamese Deputy Prime Minister Vu Van Ninh, and World Bank Country Director for Vietnam Victoria Kwakwa are pictured at the Vietnam Business Forum in Hanoi on December 1, 2015.

Businesses are still facing myriad difficulties in their operations in Vietnam, many said at the Vietnam Business Forum (VBF) final-term meeting in Hanoi on Tuesday.

The obstacles range from corrupt officers and erroneous software in the customs sector, to complicated paperwork and continual inspections in the field of tax, according to enterprises.

The VBF, known as one of the first public-private dialogue projects implemented by the World Bank and its International Finance Corporation, is held every six months in Hanoi to establish regular channels of communication between foreign and domestic companies and the Vietnamese government.

Most of the complaints raised at the Tuesday meeting are about tax and customs matters, even though Vietnam has launched many reforms within the two sectors.

The Vietnamese customs policies have changed so quickly and frequently that businesses have had to abide by new regulations despite not clearly understanding the old rules, the Vietnam Chamber of Commerce and Industry (VCCI) said, citing its own report.

“There are customs officers who behave with total indifference to the problems and damage this causes businesses,” the report says.

The programs used in customs declaration and clearance still encounter errors, while both customs agencies and the software creators avoid responsibility when facing complaints, according to the report.

Some software programs fail to read the barcode on the tax declaration forms of businesses, while other systems only contain outdated regulations, the VCCI elaborated.

Shimon Tokuyama, chairman of the Japanese Business Association in Vietnam, complained that some customs officers still ask for unofficial fees even after an automatic customs clearance system was implemented in April last year.

In the meantime, Fred Burke, co-head of the Investment and Trade Working Group with the VBF, said many businesses have obtained investment incentives from the Vietnamese government, but these arrangements are deliberately ignored by customs officers.

Sherry Boger, chairwoman of the American Chamber of Commerce in Vietnam, warned that corruption is destroying both Vietnam’s economy and society, and urged that stronger anti-corruption and anti-bribery measures be taken.

Vu Tien Loc, chairman of the VCCI, also expressed his concern that businesses continue to incur increasing costs to complete administrative paperwork, and that their operations are inspected too frequently.

“The bigger a company is, the more inspections and checks it has to undergo,” he whined.

“This is one of the reasons keeping businesses from expanding their scale.”

Loc, citing the VCCI report, said tax inspection remains a burden for businesses, and “there are too many agencies authorized to inspect firms over tax issues.”

“Some businesses said that while they used to be inspected every two years, the frequency is now once a year,” he added.

In his concluding speech at the forum, Vietnamese Deputy Prime Minister Vu Van Ninh ordered that relevant industries and agencies seriously consider grievances aired by businesses and seek resolutions to those issues.

He also urged agencies, particularly tax and customs, to strengthen their administrative reforms to “create the most favorable possible conditions for business.”

The VBF was established as a project of the Vietnam Consultative Group at a meeting between the Vietnamese government and its donor partners in Tokyo in 1997, according to the forum’s website.

The forum is widely recognized for contributing to reforms that have improved the business environment in Vietnam.

The 2015 mid-term VBF was held in June, when the Vietnamese government asserted it is “not satisfied” even though the country’s socio-economic development has improved.

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