Prime Minister impatient with more than 5,000 'sub-licenses'

“There are so many business licenses, so many” – Prime Minister Nguyen Xuan Phuc said and emphasized, “If the Minister sees that businesses have to wait in line for a long time, he must review the Ministry’s working style.”

The Prime Minister emphasized this content when concluding the regular Government meeting in July on August 3, after Government members discussed measures to reduce fees and input costs for businesses.

Prime Minister Nguyen Xuan Phuc speaks at the meeting.

Minister of Finance Dinh Tien Dung said that based on the review of the proposed fee reduction, the Ministry of Finance issued an official dispatch on July 31 reporting to the Prime Minister on considering reducing fees and input costs for businesses.

However, some Government members such as Minister of Construction Pham Hong Ha and Minister and Head of the Government Office Mai Tien Dung said that the report of the Ministry of Finance has not presented a comprehensive picture of business costs and suggested that the Government needs to give more fundamental direction.

According to Minister and Chairman Mai Tien Dung, costs in areas such as construction permits, labor costs, capital, market access, etc. need a more comprehensive view.

In particular, the Minister stated that according to the Vietnam Chamber of Commerce and Industry, in 243 conditional business lines, there are currently a total of 5,719 business conditions (often referred to as sub-licenses).

Of these, the Ministry of Industry and Trade has the most number of 27 conditional business lines under its management with 1,220 business conditions. The Ministry of Construction has the least number of 17 conditional business lines with 106 business conditions.

“We recommend that the Prime Minister assign the Ministry of Planning and Investment to preside over the review of all other areas, in addition to the areas that the Ministry of Finance has prepared. This will reduce both official and unofficial costs,” said Minister and Chairman Mai Tien Dung.

According to Deputy Prime Minister Vuong Dinh Hue, one area that still causes businesses to incur huge costs is specialized inspection of import and export goods. Currently, the rate of shipments requiring specialized inspection is up to 35% but the rate of violations is only 0.06%. The goal is to reduce the rate of shipments requiring specialized inspection to 15%.

“Ministers need to be determined to implement this, especially the Ministries of Industry and Trade, Agriculture and Rural Development, Health, and Transport. Some ministries have issued a list of specialized inspections but do not have regulations on standards and inspection conditions, which means that the ministry can inspect whatever it wants. If this can be done, experts estimate that it can reduce tens of thousands of billions in costs for businesses,” said the Deputy Prime Minister.

2017 is the year of cost reduction for businesses

Concluding this content, Prime Minister Nguyen Xuan Phuc assessed that the recent interest rate reduction and the results reported by the Ministry of Finance are very practical for businesses.

However, there are still many high costs, especially capital costs, social insurance costs, union funds... Currently, social insurance contributions in Vietnam are the highest in the ASEAN region, reaching 32.5% of monthly salary (enterprises pay 22%, employees pay 10.5%). That does not include 3% union fees.

Meanwhile, in the same region, in Malaysia, the social insurance contribution rate accounts for 13% of monthly salary, in the Philippines it is 10%, in Indonesia it is 8%... According to the Prime Minister, this is something that needs to be researched and discussed again.

Along with that, transportation and logistics costs are still high. The costs of business registration, trademark registration, tax declaration, customs... have decreased, but very slowly. In particular, the Prime Minister emphasized the cost of granting sub-licenses for conditional business lines.

Agreeing with the proposal of Minister and Head of the Government Office Mai Tien Dung, the Prime Minister emphasized that “there are many, many business licenses, people complain a lot, they need to be reviewed. This is also the stage that gives rise to many complicated problems.”

“The Minister sees that businesses have to queue for a long time, so he must review the Ministry’s working style. He must eliminate unreasonable business conditions,” the Prime Minister emphasized.

The Prime Minister assigned the Ministry of Finance to review all customs fees and charges, taxes, especially measures to reduce the rate of import and export shipments requiring specialized inspection. The Ministry of Planning and Investment reviewed all procedures related to investment licenses, construction licenses, land access, information access, and costs incurred to complete procedures. The State Bank of Vietnam promoted non-cash payments and payments via banks.

For unofficial costs, many measures are needed, especially publicity, transparency, application of information technology, reform of administrative procedures so that the person carrying out the procedures and the officer handling the procedures do not meet directly, and strengthening inspection and examination of the responsibilities of the heads and assigned agencies and units.

Ministries, branches and localities are requested to report on the situation of reducing business costs in the first quarter of 2017, send it to the Ministry of Finance for synthesis and report to the Government. The Prime Minister emphasized the spirit of making 2017 the year of reducing business costs.

According to chinhphu.vn