Customs and tax-related problems fueled a meeting between businessrepresentatives from the Republic of Korea (RoK) andVietnamese authorities held in Hanoi on June 22 by the GovernmentOffice's Department of Administrative Procedures Reform to gatheropinions from the RoK business community.
" Vietnam hassimplified about half of its administrative procedures so far and isdetermined to complete the process now," said the department's deputydirector, Ngo Hai Phan.
The Korean Chamber of Commerce andIndustry (Korcham) would collect opinions from Korean firms so that theMinistry of Finance and other concerned ministries and agencies mightstudy and resolve the issues raised, Phan said.
Thegeneral director of automobile manufacturer GM Daewoo Vietnam , KimJung In, told the meeting that the biggest obstacle to doing business inVietnam was import and export procedures.
"Many of our papers have never been satisfactorily processed," Kim said.
In addition, customs officials required detailed lists of components and their rate in finished products.
"This is very difficult to implement because these lists are consideredthe proprietary secrets of our business," said the general director ofbedding importer Everpia Vietnam , Lee Jae Eun.
Leealso suggested the use of local letters of credit to speed theprocessing of imports. These were successfully utilised in RoK and wouldhelp reduce administrative procedures and attract more investment, hesaid.
However, since the application of a local letter ofcredit would require the co-ordination of the entire banking system,Vietnam would need time to study and implement such a process,responded a Ministry of Finance representative.
Anotherissue raised at the meeting was that different codes were applied to thesame imported products. However, an official of the General Departmentof Customs said, "If businesses see customs officials applying twodifferent codes for the same product, they should report immediately tothe authorities."
Lee also voiced concerns about tax payments and the application of tax incentives for foreign investors.
"We have not even received promised tax incentives in some cases, sothe company has had to increase product prices, which in turn hasaffected Vietnam 's export competitiveness," Lee said.
"We have also been able to enjoy tax refunds two months after completing all paper work, while interest rates are rising."
Lee proposed tax declarations on a quarterly basis rather than monthly to reduce administrative burdens on investors.
According to Korcham, around 2,500 Korean enterprises worth a combined23 billion USD are operating in Vietnam , of which 70 percent aresmall- and medium-sized enterprises.
Up to 60 percent ofthe questions raised by Korean businesses about administrativeprocedures were due to their inability to master all of the regulations,but the other 40 percent have encountered real shortcomings withprocedures applied in Vietnam, Deputy Minister of Finance Do Hoang AnhTuan told an earlier meeting./.
" Vietnam hassimplified about half of its administrative procedures so far and isdetermined to complete the process now," said the department's deputydirector, Ngo Hai Phan.
The Korean Chamber of Commerce andIndustry (Korcham) would collect opinions from Korean firms so that theMinistry of Finance and other concerned ministries and agencies mightstudy and resolve the issues raised, Phan said.
Thegeneral director of automobile manufacturer GM Daewoo Vietnam , KimJung In, told the meeting that the biggest obstacle to doing business inVietnam was import and export procedures.
"Many of our papers have never been satisfactorily processed," Kim said.
In addition, customs officials required detailed lists of components and their rate in finished products.
"This is very difficult to implement because these lists are consideredthe proprietary secrets of our business," said the general director ofbedding importer Everpia Vietnam , Lee Jae Eun.
Leealso suggested the use of local letters of credit to speed theprocessing of imports. These were successfully utilised in RoK and wouldhelp reduce administrative procedures and attract more investment, hesaid.
However, since the application of a local letter ofcredit would require the co-ordination of the entire banking system,Vietnam would need time to study and implement such a process,responded a Ministry of Finance representative.
Anotherissue raised at the meeting was that different codes were applied to thesame imported products. However, an official of the General Departmentof Customs said, "If businesses see customs officials applying twodifferent codes for the same product, they should report immediately tothe authorities."
Lee also voiced concerns about tax payments and the application of tax incentives for foreign investors.
"We have not even received promised tax incentives in some cases, sothe company has had to increase product prices, which in turn hasaffected Vietnam 's export competitiveness," Lee said.
"We have also been able to enjoy tax refunds two months after completing all paper work, while interest rates are rising."
Lee proposed tax declarations on a quarterly basis rather than monthly to reduce administrative burdens on investors.
According to Korcham, around 2,500 Korean enterprises worth a combined23 billion USD are operating in Vietnam , of which 70 percent aresmall- and medium-sized enterprises.
Up to 60 percent ofthe questions raised by Korean businesses about administrativeprocedures were due to their inability to master all of the regulations,but the other 40 percent have encountered real shortcomings withprocedures applied in Vietnam, Deputy Minister of Finance Do Hoang AnhTuan told an earlier meeting./.
