Businesses complain draft pricing law impose non-market rules

The State recently has applied a lot of new drastic measures in an effort to improve the efficiency of the market management. However, the draft pricing law seems to be unable to meet that goal.

The escalation of input material prices has been badly affecting enterprises’ production. Increasing production costs have made products and services less competitive.

Enterprises complain that they have to struggle to survive the current difficulties, and they hope the pricing law can settle many current problems. However, businessmen have said that the drafted provisions in the pricing laws impose non-market regulations in the market management, which would hinder the business and distort the business environment.

The regulation on price registration is what businesses complain about most. Price registration means that institutions and individuals, who make and provide the goods and services named in the list of products for price stabilization, have to submit the price registration forms to competent state agencies when they apply measures to stabilize prices.

Some other institutions and individuals have to report the sale or the purchase prices of goods and services and take responsibility for the accuracy of the registered prices.

In fact, the regulations stipulated in the Circular No 122 and released by the Ministry of Finance, have reportedly put big difficulties for enterprises.

The enterprises, which have to register sale prices in accordance with Circular 122, have complained that it takes them too much time and expenses to make documents for price registration. To date, state management agencies have not said clearly which kinds of documents are needed for the price registration. Therefore, everything depends on state management agencies’ officers.

The registration has to be repeated every time when enterprises plan to change the prices of goods and services. They have to present to management agencies the documents to show the actual production and business costs, and prove that they have reasons to adjust the sale prices.

Businesses fear that once the regulations are stipulated by the pricing law, this will make enterprises’ competitiveness decrease.

Enterprises do not want to register sale prices also because they do not want to reveal their business secret. They said that price is the most important factor which decides their competitiveness in the market.

Businessmen have also complained that the draft pricing law mentions many other non-market price management measures, such as setting up the price stabilization fund, controlling the factors that create price, defining prices for some kinds of goods and services.

The noteworthy thing is that the setting of prices only base on ambiguous factors, such as the expected profits, the currency purchasing power, and the payment capability of consumers.

Besides, the draft law says that state management agencies would define temporary prices in case involved parties still cannot reach any agreements on pricing.

A businessman, who asked to be not named, said that the draft law said that the price stabilization policies would be applied when the prices of goods and services essential for production and people’s daily life have “abnormal fluctuations”. However, the draft law does not explain what “abnormal fluctuations” means.

The draft law also stipulates that the government would promulgate the list of goods and services whose prices would be defined by the State. Meanwhile, the Competition Law stipulates that the State only has the right to define the purchase and sale prices of the goods and services belonging to the state monopoly. As such, it seems that with the draft law, the state would be given more power.

Source: TBKTSG

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