VCCI Urged to Get Actively Involved in Lawmaking for Better Business Climate

10:05:24 AM | 8/23/2022

Member of the Party Central Committee and Vice Chairman of the National Assembly Nguyen Duc Hai led a working visit to the Vietnam Chamber of Commerce and Industry (VCCI) on August 19, 2022.

Reporting to the visiting delegation, VCCI President Pham Tan Cong said that VCCI has excellently completed directions and tasks assigned by the Party and the Government. Its activities are always professionally improved, reformed, and improved in quality to meet economic and business development needs. VCCI's role in developing institutions, policies and laws, improving the business investment environment, and promoting administrative procedure reform has been increasingly affirmed and enhanced.

Remarking on business performance, Mr. Cong said, after a difficult year of COVID-19 pandemic in 2021, entering 2022, the business sector achieved significant development. The market, particularly the domestic market, recovered over 75-85% from the pre-pandemic time in some industries. Accommodation, catering and hospitality services are showing clear signs of recovery.

On the recovery path following a stressful period of the COVID-19 pandemic, businesses reported some difficulties that need to be addressed from now to the end of 2022 and 2023 regarding increased labor costs, access to capital funds, increased input costs without any sign of immediate easing, access to land and business premises, he said. Some industries are recovering strongly, including tourism and services, which are facing human shortages. Access to business support programs within the framework of the Law on SME Support is still limited. In addition, in some fields, administrative procedures are troublesome and difficult for businesses to comply with, particularly tax, land, insurance and construction procedures.

Representatives of many business associations and businesses at the meeting said that Resolution 43/2022/QH15 is an important business support policy for post-pandemic recovery. Provisions in guiding documents are closely based on this resolution to provide support for the right beneficiaries. However, regarding timeliness, Resolution 43, which took effect from January 11, 2022, and its guiding documents are a bit later than expected. According to statistical data, the amount of disbursed capital is much slower than the schedule. If the disbursement was faster, it would significantly support business recovery and development.

According to some representatives, access to "cheap capital" (with a supported interest rate of 2%) is also quite difficult for many businesses due to lending conditions, including required collaterals. Besides, deposit interest rates at commercial banks are tending to look up, leading to an increase in lending interest rates. Recently, some banks have raised their lending rates by 1-2%. Thus, when lending interest rates go up, the 2% interest policy support will be "less supportive" for businesses.

Speaking at the meeting, National Assembly Vice Chairman Nguyen Duc Hai affirmed that the Vietnamese Party and Government always highly appreciate the role of enterprises and entrepreneurs in the country's development. Decisions by the Politburo, the National Assembly and the Government are always for the interests of the people and businesses and place them at the heart. During the 14th term, the National Assembly and its Standing Committee passed 73 laws, ordinances and resolutions, including important laws on investment and business. The 15th National Assembly promulgated the full-term lawmaking agenda, with priority given to improving the investment and business environment, the legal environment and policies to facilitate investment, production and business of people and businesses.

In the coming time, the National Assembly will consider many important bills that will have great impacts on people and businesses such as Land Law (amended), Bidding Law, Pricing Law, Real Estate Business Law and Housing Law, which will need multidimensional information from different subjects, including enterprises and entrepreneurs. Emphasizing the need for these laws, Mr. Hai affirmed that recommendations and proposals from VCCI and the business community are an important source of information learned from practice for the National Assembly and its Standing Committee to reconsider and complete mechanisms, policies and laws in the coming time. At the same time, this approach also shows that the National Assembly is aiming for "resolutions and policies that carry the breath of life and change for the benefit of people and businesses." 

Recognizing the important role and appreciating VCCI's working innovations in the past, NA Vice Chairman Hai suggested that VCCI should better promote its role and actively participate in law-making to help form an enabling business climate for business development, especially in the local business environment. VCCI should continue to reform and enhance its activities to collect better opinions from the business community on draft legal documents.

At the meeting with NA Vice Chairman Nguyen Duc Hai and the NA delegation, VCCI proposed eight solutions to facilitate business recovery and development:

One, focus on improving the legal framework for business investment. Enterprises have continued reporting on conflicts and overlaps of some legal documents on business investment. Currently, important draft laws regarding business investment are being drafted, including Land Law, Bidding Law, Housing Law, and Real Estate Business Law. This is a good opportunity to look at the business legal system as a whole, address conflicts and overlaps and listen to feedback from businesses. Therefore, it is suggested that lawmaking needs to be consulted widely and made public to the business community while the reception and interpretation of opinions should be made transparent to build the trust of the business community.

Two, continue to have solutions to reduce costs for businesses, enhance access to government-backed support packages. The room for the Government to implement these solutions is still quite large. For example, formulating a plan to reduce value-added tax and special consumption tax on gasoline; continuing research on reduction of preferential import duty on gasoline; urgently researching and making a plan to reduce electricity bills - an important input cost of many industries.

Three, improve the effect of recovery support policies following the COVID-19 pandemic outbreak on businesses. Support packages have been launched but the disbursement speed is reportedly slow. Enterprises are complaining about difficult access to preferential loans because of unsuitable borrowing conditions for them, especially small and micro companies. Therefore, it is necessary to take measures to remove obstacles in accessing preferential loans for enterprises to make recovery support policies really effective.

Four, have timely support solutions for strongly recovering industries such as tourism and services which are currently facing personnel shortages. For this purpose, the National Assembly can launch monitoring programs on the implementation of vocational training programs and improve human resource quality in the coming time.  

Five, build and improve the legal framework to facilitate innovation-driven business establishment and development. There is a need for an appropriate mechanism to encourage enterprises to invest in innovative and creative activities while balancing and harmonizing the interests of all stakeholders in the economy. In addition, in order to keep up with the green development trends of the world and launch the circular economy in Vietnam, we propose developing and promulgating a separate law on the circular economy, aligning innovations with circular economy models and realizing sustainable economic development goals.

Six, promote the program for business environment improvement and national competitiveness enhancement, with a focus on reforming administrative procedures and business conditions and cutting costs for businesses. It is important to focus on reforming some areas of troublesome administrative procedures that have a strong impact on businesses such as land, tax, social insurance, construction, market management, traffic, fire prevention, environment, treasury and labor.

Seven, improve the capacity to take advantage of FTA tariff preferences, and open up policies on rules of origin. Vietnam currently has 15 FTAs in effect and this is a huge advantage in these markets when Vietnam's main competitors do not have FTAs with them. We recommend having a specific and practical action program to boost the capacity off utilizing FTA tariff preferences for exported and imported goods and handle policy matters relating to rules of origin in FTAs 

Eight, further enhance the working performance of government apparatus at all levels. It is necessary to have solutions to check performance, and improve the performance of all-tier authorities. It is also important to highlight the personal responsibility of agency leaders; promptly encourage and reward enterprising, responsible, creative and flexible persons when carrying out pandemic prevention measures and work with relevant parties to remove bottlenecks in production and business activities of enterprises. 

Source: Vietnam Business Forum