Economists, policy makers, domestic and international organizations all say that complicated procedures are one of the three biggest problems that hinders the development of Vietnam’s economy.

In the new period of development, if administrative procedures cannot be stream-lined, Vietnam is not likely to obtain a high economic growth rate of 7-8 percent per annum.

The Government has been aware of the need for administrative reform. A resolution to revise administrative procedures was issued 15 years ago in 1994. Since that time, drastic measures have been taken to simplify administrative red tape. However, as Nguyen Minh Man, Head of the Administrative Procedure Reform Department, admitted, progress has been limited.

“The administrative procedure reform has brought modest results, not because we are lacking determination, but because we still do not have suitable measures,” Man maintained.

The IFC report on the global business environment, sponsored by the World Bank, demonstrated that Vietnam ranks the 140th among 182 economies in terms of tax procedures. The other ASEAN countries’ rankings include Singapore, which ranked fifth, Malaysia 21st, Thailand 22nd and Indonesia at 116th.

The report showed that Singapore businesses only spent 84 hours a year to fulfill their tax duties. In Malaysia, businesses spend 145 hours, while Thai businesses must spend 264 hours and Indonesia 266 hours.

Vietnamese businesses lose 1,050 hours a year to tax procedures and financial duties.

A Prime Minister’s taskforce on administrative procedure reform official claimed that there has been no concrete survey on the effects of the complicated procedures. However, the influence is so big that many people would rather pay additional fees, known as the “apparatus lubrication fee”, to avoid procedures.

“The Government had never, in the last 65 years since Vietnam obtained its independence, been so determined to push for administrative procedure reform like in 2009,” asserted Man.

Vietnam has completed the first stage of reform (checking all currently applied procedures) and has entered the second stage (removing all unnecessary procedures).

Deputy Prime Minister Nguyen Sinh Hung has ordered the Ministry of Finance to raise Vietnam’s grade in the IFC’s ranking to 120th from 140th, and reduce the number of hours spent on tax procedures to 600 hours. Hung has also decided that the time needed for customs procedures must be reduced to a level equal to 1.5 times the average time in neighboring countries.

Deputy Minister of Finance Do Hoang Anh Tuan is committed to slashing at least 30 percent of the 330 currently applied tax procedures and 239 customs procedures in 2010 to create a more favourable business environment.

Source: VietNamNet/DTCK