Enterprises Spend Large Amounts on 'Underground Fees'

Almost all enterprises in Vietnam currently have to set aside a large portion of their revenue to pay ‘underground fees’ allegedly to ‘lubricate government apparatus’, revealed a survey conducted by the Vietnamese Chamber of Commerce and Industry (VCCI).

 

The survey, conducted at 16,200 enterprises in 42 provinces and cities nationwide, showed that Hanoi is the most ‘costly’ location, with such fees equaling to 29 per cent of the enterprise’s revenue. In addition, 77 per cent of enterprises have to pay commissions to state officials for logistics services at conferences and workshops.

 

In Ho Chi Minh City, 60 per cent of enterprises said that the fees have hindered their business while the lowest figure was reported in southern Binh Duong province with 12 per cent.

 

The fees bear badly on the localities’ competitiveness index rating, which ranks Binh Duong at the top, Hanoi and Ho Chi Minh City, the two largest cities in the communist nation, were rated 14th and 17^th, respectively.

 

The figures show that more attention still needs to be paid to administrative reform and anti-corruption activities, VCCI said.

 

Besides, market admission remains a big problem, it said.

 

Enterprises, once again, complained about the difficulties in entering markets, and gaining access to land and information. It takes enterprises more than 45 days on average to complete procedures for business registration, the time is at least one month in localities with reformed administrative mechanisms.

 

Meanwhile, only 33 per cent of enterprises can begin operations after completing the necessary procedures. In several localities, 20 per cent of enterprises could only receive land for operation after three months, while 70 per cent said they missed business opportunities due to the lack of land for workshop premises.

 

Between 50-80 per cent of enterprises said that they could only receive the necessary information through a special relationship with state management authorities, showing the low transparency of civil authorities and the difficulties in accessing information.