Businesses Need Active Involvement in Policy Making

Unstable policies and laws pose a major risk to businesses and they are well aware of the importance of their roles in policymaking. In reality, policy consultation is now focusing on big companies. Small and micro businesses are almost unaware of the existence of new policies. Even, some only know the existence of a policy when they are fined for violating such policy.

 

Besides, the lack of opinion exchanges and consultations in the course of drafting is attributed to the enactment of many incompatible, impractical and unfitting regulations. This in turn results in quick revisions and amendments.

 

Therefore, according to Mr Tuan, companies should lobby policies when they experience difficulties and problems arising from irrational regulations. When the State has prepared a new policy that may affect them or when they have other policy initiatives to boost business efficiency, they should raise their voice.

 

"Businesses should not just wait for State agencies to introduce policies but they need to be proactive in suggesting policymaking and modification because the impact of policies and laws on them is indeed, growing up,” he warned.

 

According to VCCI's surveys, policy changes cause the second largest impact on operations and competitiveness of enterprises, only after the change in exchange rate, inflation and interest rates.

 

The participation in policy formulation will help enterprises in improving the ease of doing business as well as reducing operational costs besides having a thorough grasp of legal documents to apply them in the future. Small and micro businesses can rely on VCCI to speak out their voice. Citing the double tax on shipping businesses as an example, he said they cooperated with VCCI to propose the Ministry of Finance to abolish a regulation on cost and time-consuming transport document archiving and replacing it with electronic archives. This proposal was approved and helped reduce the management work from 208 days to below 10 days each year, thus contributing to considerable cost reductions for enterprises.

 

Another typical example was VCCI’s successful cooperation with Vietnam Steel Association and Vietnam Paper and Pulp Association to lobby import deposit policies on scrap imports. Accordingly, the deposit value was reduced from 80 percent to 10 - 20 percent of the shipment value while the deposit at the Environmental Protection Fund will be calculated on agreed interest rates rather than non-term interest rates earlier drafted.

 

However, the ‘loss’ of enterprises in policymaking is their time, money and possibly unwanted risks. ‘Unwanted risk’ is perhaps intentional difficulties caused by State agencies in other works. It is said that after some companies proposed simplifying tax procedures, they have their taxes inspected very soon after that.

 

Policy changes may create opportunities for some enterprises but they also take opportunities from other ones. But, above all, profits will go to companies knowing to grasp opportunities.

 

Also at the seminar, VCCI and the Public Participation and Accountability Facilitation Fund (PARAFF) introduced a project on establishing a suitable and effective policy for consultants for small and micro businesses. The project has confirmed the role and necessity of enterprises to be known and the opportunity of partaking in policymaking process in Vietnam, especially for small and medium-sized enterprises (SMEs). This activity is beneficial to both enterprises and the State. On the business side, they will have the opportunity to know policies in advance to be more active with their business operations and contribute opinions in support of their long-term operations. On the State side, this activity will help provide additional input for the formulation of policies and leverage the wisdom of the masses to make better regulations.