Resolution No. 139/NQ-CP dated November 9, 2018 of the Government on Promulgating the Action Program to reduce costs for enterprises

RESOLUTION

Promulgating the Action Program to reduce costs for enterprises[1]

THE GOVERNMENT

Pursuant to the June 19, 2015 Law on Organization of the Government;

Pursuant to the Government’s Resolution No. 117/NQ-CP of November 9, 2017, on the Government’s October 2017 regular meeting;

At the proposal of the Minister of Planning and Investment,

RESOLVES:

Article 1.To promulgate together with this Resolution the Government’s Action Program to reduce costs for enterprises.

Article 2.This Resolution takes effect on the date of its signing.

Article 3.Ministers, heads of ministerial-level agencies, heads of government-attached agencies, chairpersons of provincial-level People’s Committees, and related organizations and individuals shall implement this Resolution.-

On behalf of the Government
Prime Minister
NGUYEN XUAN PHUC

GOVERNMENT’S ACTION PROGRAM TO REDUCE COSTS FOR ENTERPRISES

(Promulgated together with the Government’s Resolution No. 139/NQ-CP of November 9, 2018)

I. ASSESSMENT OF THE SITUATION

In recent years, improving the business environment, particularly cutting law compliance costs, is a focus of the Government as well as authorities at all levels and all sectors. Many government resolutions have been implemented, focusing on institutional and administrative procedure reforms and facilitating business operations. The implementation of these resolutions has contributed to reducing the burden of business costs in general and law compliance costs in particular for enterprises. However, the reality shows that there remain limitations and shortcomings, and it is necessary to continue implementing solutions to cut more costs for enterprises. According to the World Bank report, Vietnam’s business environment indicators have improved significantly, but the rankings of many indicators are still far lower than those of other countries in the region. In 2018, total taxes and insurance expenses paid by Vietnamese enterprises accounted for 38.1% of pretax profit, while those rates in Thailand and Indonesia were 28.7% and 30%, respectively. The Vietnam Chamber of Commerce and Industry’s 2017 Provincial Competitiveness Index (PCI) report shows that 59.3% of enterprises say that their peers often have to pay informal costs; leaders of about 30% of enterprises have to spend more than 10% of their time on inquiring about and complying with regulations; 44% of enterprises say that the land lease and purchase procedures are complex; and 16% of enterprises say that land prices set by the State are high.

In order to contribute to cutting costs for enterprises, and improving efficiency, competitiveness and productivity of the economy, the Government requests ministries, sectors and localities to continue implementing more drastic and synchronous solutions and reforms, especially slashing unreasonable costs, creating favorable conditions for enterprises to develop production and business.

II. OBJECTIVES

- General objective: To thoroughly reduce unreasonable costs of compliance with business law, and repel and prevent acts that give rise to informal costs for enterprises; to create a low-cost, stable business environment; to promote investment, market entry, and competition.

- Specific objectives:

+ To reduce and simplify unnecessary business conditions, strictly control the promulgation of regulations related to investment and business conditions; to limit to the utmost the issuance of unreasonable and unnecessary business conditions;

+ By 2020, to reduce and simplify regulations on investment, land, construction, tax payment and social insurance to achieve the average score of ASEAN 4 according to the World Bank’s Doing Business Index;

+ By 2020, to halve the percentage of enterprises saying that their peers have to pay informal costs under the PCI Survey by 2020;

+ By 2020, to publicize 100% of inspection and examination activities and handling results on the websites of competent agencies;

+ By 2020, to reduce the tax and social insurance costs of enterprises according to the Business Environment Index to the average level of ASEAN 4.

III. TASKS OF MINISTRIES, SECTORS AND LOCALITIES

1. Regarding law compliance costs

a/ Regarding the cost of compliance with the law on market entry

- Ministries, sectors and localities

+ To strictly perform the task of reducing and simplifying 50% of investment and business conditions as stated in the Government’s Resolution No. 01/NQ-CP of January 1, 2018, ensuring compliance with Article 7 of the 2014 Investment Law.

+ To review and amend technical regulations in the direction of not regulating the contents of business condition nature.

+ To organize the strict implementation of the Prime Minister’s Decision No. 985/QD-TTg of August 8, 2018, promulgating the Plan for implementation of the Government’s Decree No. 61/2018 /ND-CP of April 23, 2018, on the implementation of the single-window and inter-agency single-window mechanism in settling administrative procedures.

+ To continue performing the tasks stated in the Prime Minister’s Directive No. 20/CT-TTg of July 13, 2018, on intensifying the reform of specialized inspection and reduction and simplification of business conditions.

+ To continue reducing and simplifying the reporting regimes according to the Prime Minister’s Decision No. 559/QD-TTg of April 24, 2017, approving the Scheme on “Simplification of the reporting regimes in activities of state administrative agencies” in order to cut costs for enterprises.

- The Ministry of Planning and Investment shall assume the prime responsibility for, and coordinate with related ministries and sectors in:

+ Amending the Investment Law in the direction of clarifying the concept and content of the phrase “business conditions” as the basis for evaluating and monitoring the system of legal regulations on conditional business lines, ensuring the distinction between the concept of business conditions and concept of technical standards and technical regulations.

+ Annually, drawing up reports on the system of legal regulations on conditional business lines (including those in technical regulations and standards, if any), proposing the National Assembly or Government to amend and supplement the list of conditional business lines in the Investment Law’s annex on conditional business lines in the direction of removing from such list those lines which do not greatly affect the public interests, have no special characteristics and can be managed in another form, and adjusting the scope of control for a number of sectors and fields with narrow impacts.

+ Simplifying enterprise registration forms and declarations; reducing the composition of the dossier of registration of changes in enterprise registration contents.

+ Continuing improving the legal framework on business household registration on the basis of studying the plan on combined business registration and tax registration for business households.

+ Improving the website on business registration and information to be more intuitive (with on-screen instructions) and easier to use, and better function.

+ Amending the Government’s Decree No. 193/2013/ND-CP of November 21, 2013, detailing a number of articles of the Law on Cooperatives in the direction of consolidating the business registration and tax registration procedures for cooperatives.

+ The Ministry of Planning and Investment shall assume the prime responsibility for, and coordinate with the Ministry of Labor, War Invalids and Social Affairs and General Department of Taxation in, formulating an inter-agency mechanism for registration of enterprise establishment, declaration of tax payment, declaration of employment and declaration of employees eligible for social insurance.

- The Ministry of Justice shall promote the role of appraising draft legal documents on business conditions to ensure that new regulations conform with the 2014 Investment Law without imposing unnecessary and illogical requirements.

- The Ministry of Science and Technology

+ Based on the concept and content of the phrase “business conditions” prescribed in the amended Investment Law, to study and propose amendments to legal documents guiding the implementation of the Law on Standards and Technical Regulations to ensure that technical regulations do not rule business conditions.

+ To promote the role of appraising draft legal documents on national technical regulations to ensure that the new regulations comply with the 2014 Investment Law without unnecessary and illogical requirements.

- The Administrative Reform Advisory Council shall annually publish a report on criteria for the assessment of administrative procedure compliance costs.

- The Vietnam Chamber of Commerce and Industry and business associations shall take the initiative and coordinate with ministries and sectors in studying and reviewing administrative procedures and business conditions to reduce compliance costs for enterprises.

- The Government Office

+ To speed up the establishment of the National Public Service Portal in accordance with Resolution No. 36a/NQ-CP of October 14, 2015, to create a basis for cutting transaction costs between enterprises and state agencies;

+ To urge ministries, sectors and localities in implementing Decision No. 985/QD-TTg of August 8, 2018, promulgating the plan on implementation of the Government’s Decree No. 61/2018/ND-CP of April 23, 2018, on implementation of the single-window and inter-agency single-window mechanism in settling administrative procedures.

b/ Regarding the cost of compliance with the law on construction of production and business establishments

- The Ministry of Construction shall review, amend, supplement or reduce unnecessary regulations on planning procedures, planning permits and procedures for applying for permits to build works serving production and business.

- The Ministry of Planning and Investment shall assume the prime responsibility for, and coordinate with the Ministry of Construction and Ministry of Natural Resources and Environment in, reviewing and amending legal regulations so as to unify the order and procedures for licensing investment projects using land, water surface and/or sea areas and construction works in the direction of unifying the procedures into an inter-agency procedure so that investors do not have to go through many procedures at many agencies. The inter-agency procedure includes approving investment policy, demand for use of land, water surface and/or sea areas, planning, allocation or lease of land, water surface and/or sea areas (if any); and issuing documents guiding local state management agencies to carry out investment, construction, land and environmental procedures under the inter-agency mechanism.

- The Ministry of Public Security shall review the regulations on fire prevention and fighting in the direction of clarifying the regulations, minimizing unnecessary requirements for works which can share fire prevention and fighting equipment; and simplify the administrative procedures in the field of fire prevention and fighting for enterprises.

2. Regarding production and business input costs

a/ Regarding credit and banking service costs

- Ministries, sectors and localities shall organize the implementation of the Law on Support for Small- and Medium-sized Enterprises and guiding documents aimed at assisting the enterprises in accessing resources, thus contributing to reducing production and business costs.

- The State Bank of Vietnam

+ To study and build a legal corridor for commercial banks to research and develop new products to meet the needs of enterprises, for example, bank payment obligation (BPO), value chain finance, etc.

+ To study and explore appropriate solutions to promote, connect and create conditions for Vietnamese enterprises to access investment and business support funds of international financial institutions in conformity with the market principles.

+ To create favorable conditions for credit institutions to access credit information of borrowers at the National Credit Information Center of Vietnam (CIC).

+ To continue reviewing, amending and supplementing legal regulations requiring credit institutions to publicize the processes of providing products and services, creating conditions for people and enterprises to access and select services at appropriate costs, and monitor service quality.

+ To further develop non-cash payment, enhance the use of new, modern payment instruments on advanced technology platforms (mobile payment, electronic wallet, QRCode, etc.) to reduce expenses incurred in payment activities in Vietnam.

+ To operate synchronously and flexibly monetary policy instruments in order to stabilize the monetary market, contributing to inflation control, creating the foundation for credit institutions to reduce loan interest rates when conditions permit, thus helping businesses reduce input costs.

b/ Regarding labor costs

The Ministry of Labor, War Invalids and Social Affairs shall study and propose competent agencies to amend the law on social insurance to adjust the percentage of contribution to the social insurance fund in the direction of harmonizing the interests between employers and employees.

c/ Regarding science and technology costs

The Ministry of Science and Technology

- To study and propose solutions to boost the development of the market of science and technology services, including research and development services and product conformity assessment services; to encourage the private sector to provide services which have few providers, ensuring a competitive market to reduce costs for manufacturing enterprises.

- To step up activities to support enterprises in applying advanced management systems and productivity and quality improvement tools under the national program on raising the productivity and quality of products and goods of Vietnamese enterprises up to 2020, which was approved under the Prime Minister’s Decision No. 712/QD-TTg of May 21, 2010.

- To study and formulate projects and programs to support enterprises in applying standards, technical regulations, management systems and productivity and quality improvement tools in the coming period, ensuring more effective support for enterprises.

d/ Regarding logistics and cross-border trade costs

- The Ministry of Finance

+ To assume the prime responsibility for and urge ministries and sectors in establishing the national single window, ASEAN single window and enhancing trade facilitation; once every six months, to report to the Prime Minister on the progress of implementation and solutions needed to perform this task.

+ To apply electronic invoices according to the Government’s decree at the toll plazas of BOT projects in strict accordance with the roadmap, making electronic connection between the toll plazas and the tax agency according to the roadmap set by the Ministry of Finance; to share information with the Ministry of Transport when necessary for negotiation with project owners and for use as a basis for new project research.

- The Ministry of Transport

+ To review transport BOT contracts, negotiate with investors to reduce the road use prices for investment projects and credit institutions financing road construction projects for commercial purposes on the principle of harmonization of the interests of the State, investors and road users; annually, to make statistics, review and draw up plans on the sale of the right to collect service charges for the use of road infrastructure assets under its management.

+ To work out an appropriate roadmap to request project owners to implement the Prime Minister’s Decision No. 07/2017/QD-TTg of March 27, 2017, on the electronic collection of road service use charges to reduce the time and monitor the vehicle traffic through the toll plazas.

- The National Steering Committee for ASEAN Single Window, National Single Window and Trade Facilitation shall direct related ministries and sectors to prepare action plans to improve the World Bank’s Logistics Performance Index and OECD Trade Facilitation Indicators.

3. Regarding charges, fees, land rentals and royalties

a/ Provincial-level People’s Committees shall review and evaluate all the regulations on charges and fees falling under the jurisdiction of provincial-level People’s Councils, and propose to provincial-level People’s Councils plans on reduction of charges and fees in accordance with law; ensure that charges basically offset costs as prescribed in the 2015 Law on Charges and Fees; and publicly explain the grounds for calculation of charges and fees.

b/ The Ministry of Natural Resources and Environment shall study and propose the mode of collection and rates of royalty for the mining right in the direction of reducing the financial burden on enterprises.

4. Regarding informal costs

a/ Ministries, sectors and localities

- To intensify inspection and examination of public duties, promptly rectify and strictly handle units and individuals that commit acts of harassing and troubling and creating burdens for enterprises.

- To develop documents guiding the compliance with business law within the ambit of their responsibilities and powers; to ensure that the business law is easy to understand, easy to follow, and unambiguous.

- To publicize guiding documents, explain unclear and confusing points in the regulations on business-related administrative procedures on their portals; where a regulation is unclear, to refrain from interpreting it in a way unfavorable to enterprises; to consistently apply the law to similar cases without discrimination.

- To develop a code of professional ethics for officials and civil servants who serve citizens and enterprises; to organize training courses for their officials and civil servants. To ensure publicity and transparency, and combat corruption, especially bribery among officials and civil servants at all levels of administration.

- To organize training courses for officials and civil servants on the laws on corruption prevention and combat, complaints and denunciations and the State’s policies and laws on the performance of public duties.

- To strongly promote the reform of administrative procedures, increase the application of information technology, publicity and transparency in state management activities; to step up the building of public service portals and electronic single-window information system of ministries and provincial-level administrations for the receipt and settlement of administrative procedures and the provision of online public services falling within their competence.

- To seriously perform the tasks stated in the Prime Minister’s Decision No. 28/2018/QD-TTg of July 12, 2018, on the sending and receipt of e-documents among agencies in the state administrative system.

- To organize polls among the people and enterprises on the quality of public administration and informal costs at provincial-level departments, sectors and district-level authorities according to the people scoring method, publicize the results and request the departments, sectors and districts to adopt solutions to improve the quality of public administration and reduce informal costs.

- To direct the prompt and lawful settlement of petitions, reports, complaints and denunciations of enterprises and citizens. The heads of administrations at all levels shall spend proper time on receiving citizens according to regulations, and effectively settling complaints and denunciations falling within their competence.

- To continue strictly implementing the Prime Minister’s Directive No. 20/CT-TTg of May 17, 2017, on the reorganization of inspection and examination of enterprises.

b/ The Government Office shall advise and assist the Government in examining and urging the receipt of enterprises’ feedback, petitions and denunciations about acts of harassment committed by officials and civil servants at all levels; develop modern tools to receive feedback, petitions and denunciations from enterprises and citizens about acts of harassment committed by officials and civil servants (such as smartphone apps, and social media platforms).

c/ The Government Inspectorate:

- To quarterly publicize the results of handling cases and matters in the mass media and on its portal.

- To create a special protection and support mechanism for enterprises denouncing acts of harassment during the time of handling the cases and matters and 2 years after the denunciations are lodged to prevent acts of persecuting enterprises (if any). To directly inspect conclusions on negative practices and harassment acts, and handle negative and corruption cases in accordance with law.

- To intensify the inspection of the responsibility to settle complaints and denunciations; to coordinate with the ministries, sectors and localities in settling mass, complicated and prolonged complaints and denunciations.

- To propose the Central Committee of the Vietnam Fatherland Front to notify the Fatherland Front central committees at all levels of the participation in inspection teams as a witness upon request.

d/ The Vietnam Chamber of Commerce and Industry and business associations:

- To join inspection teams as a witness at the request of the inspection agency.

- To actively mobilize member enterprises to reflect acts of harassment and negative practices of officials and civil servant; to gather petitions and reports of member enterprises and send them to the Government Inspectorate.

- To inform and explain to enterprises the rights and obligations of state agencies and enterprises so that enterprises know and protect themselves against acts of harassment. To mobilize the business community not to give bribes to all officials and civil servants.

- To develop tools and solutions to support and protect member enterprises after they lodge denunciations, complaints, reports and petitions about acts of harassment committed by officials and civil servants.

- To review and identify legal regulations which are unclear, difficult to comply with, and unreasonable; to propose competent state agencies to explain, amend and supplement these regulations and publicize results for enterprises.

- To coordinate with representative organizations of people and enterprises in periodically conducting polls of citizens and enterprises on public administration quality and informal costs at provincial-level departments, sectors and district-level authorities, publicize poll results and request the provincial-level departments, sectors and districts to improve public administration quality and reduce informal costs.

IV. ORGANIZATION OF IMPLEMENTATION

1. Ministers, heads of ministerial-level agencies, heads of government-attached agencies, chairpersons of provincial-level People’s Committees, the Vietnam Chamber of Commerce and Industry and business associations shall work out plans on the implementation of this Action Program; report the implementation results to the Ministry of Planning and Investment before December 15 every year for summarization and reporting to the Government. In cases requiring  reports on the results of the implementation of Resolution 19, such reports may be consolidated into reports on the implementation of this Resolution.

2. The Ministry of Planning and Investment shall summarize and report to the Government and Prime Minister on the results of implementation of this Action Program before December 25 every year; and publish the report once it is approved by the Government.

3. In the course of implementation of this Action Program, if deeming it necessary to amend and supplement its specific contents, ministries, agencies and localities shall proactively propose them to the Ministry of Planning and Investment for summarization and reporting to the Government for consideration and decision.-

On behalf of the Government
Prime Minister
NGUYEN XUAN PHUC