Customs and tax-related problems fueled a meeting between business representatives from the Republic of Korea (RoK) and Vietnamese authorities held in Hanoi on June 22 by the Government Office's Department of Administrative Procedures Reform to gather opinions from the RoK business community.

" Vietnam has simplified about half of its administrative procedures so far and is determined to complete the process now," said the department's deputy director, Ngo Hai Phan.

The Korean Chamber of Commerce and Industry (Korcham) would collect opinions from Korean firms so that the Ministry of Finance and other concerned ministries and agencies might study and resolve the issues raised, Phan said.

The general director of automobile manufacturer GM Daewoo Vietnam , Kim Jung In, told the meeting that the biggest obstacle to doing business in Vietnam 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 considered the proprietary secrets of our business," said the general director of bedding importer Everpia Vietnam , Lee Jae Eun.

Lee also suggested the use of local letters of credit to speed the processing of imports. These were successfully utilised in RoK and would help reduce administrative procedures and attract more investment, he said.

However, since the application of a local letter of credit 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.

Another issue raised at the meeting was that different codes were applied to the same imported products. However, an official of the General Department of Customs said, "If businesses see customs officials applying two different codes for the same product, they should report immediately to the 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, so the company has had to increase product prices, which in turn has affected 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 combined 23 billion USD are operating in Vietnam , of which 70 percent are small- and medium-sized enterprises.

Up to 60 percent of the questions raised by Korean businesses about administrative procedures were due to their inability to master all of the regulations, but the other 40 percent have encountered real shortcomings with procedures applied in Vietnam, Deputy Minister of Finance Do Hoang Anh Tuan told an earlier meeting./.