Tax burden in Vietnam higher than in ASEAN 4
Tax costs in Vietnam remain higher than in ASEAN 4 (Indonesia, Malaysia, the Philippines, and Thailand), Minister of Planning and Investment Nguyen Chi Dung told the Prime Minister and Businesses Conference on May 17.
Assessing the implementation of the government’s Resolution No.35 on enterprise support and development, Minister Dung said that efforts to reform administrative procedures and improve the business investment environment, reduce costs, and encourage startups, are worthy of note.
Such efforts have played an important role in improving Vietnam’s business environment. More than 110,000 new enterprises were established last year, up 16 per cent against 2015 and reaching a record level.
According to the World Bank (WB), Vietnam rose nine steps last year (from 91 to 82) in its business environment index.
Organizations such as the European Chamber of Commerce in Vietnam (Eurocham), the American Chamber and Commerce in Vietnam (Amcham), and the Japan External Trade Organization (JETRO) all have a positive outlook on Vietnam’s business environment.
However, despite many efforts to improve the business environment, the views of the business community show that there is a gap between policy and enforcement.
Issues including inconsistency between laws, which lead to implementation bottlenecks, the difficulty in accessing capital and social resources, and the high cost of doing business remain barriers that need to be removed.
Shortcomings include, for example, the cost of transporting a container from Hai Phong to Hanoi being three-times as expensive as those from South Korea or China to Vietnam.
In addition, the cost of accessing electricity is 49 times higher than in the Philippines and Vietnam’s tax rates are higher than in ASEAN 4 countries, accounting for 39 per cent of profit, or double that in Singapore.
In order to achieve the socioeconomic development goals for 2017 and beyond, according to Minister Dung, the spirit and content of Resolution No.35 need to be thoroughly understood and more strongly implemented.
VN Economic Times