Corruption risks in Vietnam’s household business sector

This study discusses the risks, forms and costs of corruption faced by registered household businesses in Vietnam. Based on a large-scale survey of 525 registered household businesses across 8 geographical regions, we explore corruption risks in administrative procedures, especially business registration/licensing and tax compliance, as well as access to information and capital. Based on survey responses, we find that corruption in licensing is more common than in registration (through the use of middlemen, contacts or informal payments). Likewise, these practices are also used to obtain access to credit, mainly from banks. Focusing on the interaction between household businesses and tax officials, we show that there are both collusion and extortion risks, although the former tends to be more frequent. That is, while respondents complain that tax officials use their prerogative and authority to interpret laws with a view to demanding more payments, businesses and officials often tend to settle on a deal. Finally, the article considers differences between how household businesses perceive and experience corruption, and finds that corruption is often perceived as the normal cost of doing things.