EuroCham: Investors want a transparent business environment and stable policies

On the morning of November 18, the European Chamber of Commerce in Vietnam (EuroCham) held a seminar on Vietnam's third quarter economic information and the socio-economic impact of the special consumption tax policy on industries.

Vice President of the European Chamber of Commerce in Vietnam (EuroCham) - Photo: VA

According to Mr. Nguyen Hai Minh - Vice Chairman of EuroCham, the Business Confidence Index (BCI) has decreased since the pandemic and even dropped sharply - lower than the average (below 50 percentage points). Up to now, three years after the pandemic, this index has not really returned to the previous expectations.

Business confidence recovers but remains fragile

Although BCI has recovered in the last 2 quarters when the BCI index was above average, there are still many challenges. This reality requires more efforts in reforming the business environment with more convenience, openness and transparency, and policies that create favorable and stable conditions for investors.

"This year is a year of strong growth for Vietnam, so what is the main growth driver, or what policies are needed to attract investment? European businesses want a more transparent economy when administrative barriers are still a major obstacle. So what policies should Vietnam prioritize in the coming time?" - Mr. Minh raised the issue.

EuroCham's survey results in Q3 showed that the BCI index increased significantly, from 45.1 in Q3-2023 to 52 percentage points in Q3 this year, marking a strong recovery.

However, the three biggest obstacles in the operations of European businesses are administrative burden, unclear regulations and difficulties in obtaining licenses.

Ms. Nguyen Minh Thao, Head of the Department of Business Environment and Competitiveness Research (CIEM Institute), said that the business confidence index has improved, but is not really sustainable and there are still many uncertain factors.

In particular, some policies have not been improved, not only as barriers and procedures, but investors also need policy stability.

Investors need stable policies

"Many foreign investors share the need for policy stability and consider this a decisive factor in whether they will increase their investment or not. In fact, although the number of foreign investors in Vietnam is increasing, the capital scale of a project is getting smaller and smaller, requiring more substantial reforms," ​​Ms. Thao said.

Agreeing, Ms. Dinh Thi Quynh Van - Chairman of PwC Vietnam, an auditing and tax consulting company - said that improving the business environment requires many factors. Of which, administrative procedure reform is only a part, but more importantly, investors need stable, comprehensive and unified policies.

Ms. Van gave an example of an investor who shared that he wanted to build a BOT energy project in about a year, because other countries only take about 6 months. However, when studying the reality in our country, building a BOT energy project takes a dozen years and is still very difficult.

Or with the special consumption tax currently applied to 26 industries, Ms. Van said that the revenue from this tax is mainly concentrated in three industries: alcoholic beverages (beer and wine), automobiles and tobacco. Therefore, with the recent proposal to increase the tax, Ms. Van said that the impact on some industries is very large.

The imposition of the tax also raises the question of whether this tax is issued with the aim of regulating consumption rather than increasing budget revenue, but in reality, some taxable sectors are contributing a significant proportion to budget revenue. Because statistics from 2018 - 2022, the rate of special consumption tax payment often accounts for 10-12% of total state budget revenue.

In addition, Ms. Van also said that applying special consumption tax to some industries is no longer appropriate. For example, air conditioners have now become popular consumer goods, but are still subject to tax.

With the view of needing to nurture long-term revenue sources, Ms. Van believes that tax policies should encourage businesses to invest in production development, expand revenue and make profits. On the basis of expanding revenue sources, businesses will contribute more taxes and create jobs and added value for society.

Source: https://tuoitre.vn/eurocham-nha-dau-tu-muon-moi-truong-kinh-doanh-minh-bach-chinh-sach-on-dinh-20241118145745959.htm