Prime Minister Nguyen Tan Dung has requested ministries, agencies and local authorities to improve the domestic business climate.

At a conference with business players in Hanoi on April 28, PM Dung stated that the government is always committed to perfecting market mechanisms, especially administrative reform.

He directed the banking sector to offer more credit packages to enterprises while developing its capital markets.

Participants were also asked to restructure their operations in a way that lowers costs and makes themselves highly competitive.

Chairman of the Vietnam Chamber of Commerce and Industry Vu Tien Loc voiced several suggestions proposed by the business community, mostly focusing on credit and fiscal policy.

Specifically, they called for simplified lending requirements and the forming of a development fund for small and medium-sized enterprises (SMEs).

At the same time, they said corporate income tax for big companies should be cut to 20 percent while SMEs should be subject to 18 percent. Some sectors voiced the need to reduce value-added tax and do away with unnecessary taxation.

Governor of the State Bank of Vietnam Nguyen Van Binh vowed to consider slashing lending rates, assuring that they will be kept at a stable level throughout this year.

At the conference, Finance Minister Dinh Tien Dung and Minister of Industry and Trade Vu Huy Hoang answered recommendations involving customs policy and regulation of oil and gas prices, among other topics.

According to the Ministry of Industry and Trade, in the first quarter of this year, more than 18,000 businesses registered for establishment with a total capital of 98 trillion VND (4.6 billion USD), up 17 percent in number and 23 percent in value year-on-year.

However, difficulties forced nearly 17,000 others to dissolve or temporarily stop operations in the period, representing a year-on-year rise of 9.6 percent.

The private sector contributes most to the country’s GDP. From 2009 to 2012, it provided 48-49 percent, followed by the public sector (over 30 percent) and the FDI sector (17-18 percent).-VNA