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työ- ja elinkeinoministeriö

Initial level of administrative burden on businesses

According to estimates, compliance with statutory information obligations imposes an administrative burden of almost €2bn on businesses.

Subsequent to the launch of the Action Plan, baseline studies of the administrative burden were conducted in all priority areas. This was done in cooperation with the responsible authorities and relevant stakeholders, and coordinated by the Ministry of Employment and the Economy. Studies were based on business interviews and surveys.

Burden estimates that have been prepared on the basis of baseline study results are indicative. Baseline calculations are first estimates of the costs imposed on enterprises by statutory information obligations in various regulatory areas in Finland.

Studies and surveys conducted in priority areas indicate that statutory information obligations imposed on businesses in these areas resulted in an administrative burden of some €1.6 bn in 2006 (the year used as the point of reference for the Action Plan). This corresponds to less than 1% of GDP in 2006. Employers’ information obligations and taxation cause the heaviest administrative burden on businesses – amounting to over one billion euro every year. (See the table below.)

Priority area
of the Action Plan

Administrative
burden (€]



Employers’ obligations

616,311,000


Taxation

446,500,000


Financial reporting

256,153,000


Environmental permits

179,077,000


Food safety and quality

36,123,000


Public procurement

25,784,000


Statistics (incl. Intrastat):

17,900,000


Agricultural subsidies

6,710,000


Priority areas, total (€)

1,584,558,000



However, the overall administrative burden on businesses is heavier than presented above, because areas other than priorities also cause some degree of administrative burden.

It has been estimated that in Finland the eight priority areas of the Action Plan represent approximately 80% of the total burden imposed by legislation affecting businesses. Thus, according to estimates, the overall administrative burden on businesses in Finland is slightly under €2 billion (see figure below). This corresponds to approximately 1.2% of 2006 GDP.
Taakan_kokonaislähtötaso kuvio_en




















Further information on baseline studies in priority areas: Studies of the administrative costs and administrative burden

Benefits of reducing burden on businesses and the national economy

Reduction of the administrative burden on businesses enhances their competitiveness and productivity. Since costs related to the burden are often fixed, reducing it benefits SMEs most in proportional terms.

Reducing the administrative burden on businesses also has a positive impact on the national economy. According to an estimate by the Government Institute for Economic Research (VATT), alleviating the burden by 25% from the initial 1.2% of GDP by 2012 would lead to a 0.35% in GDP by 2025, compared to the hypothetical economic baseline. The increase in exports due to improved price competitiveness would clearly have the greatest impact in this regard.

VATT study on the overall economic impact of reducing the administrative burden on businesses 2011 (in Finnish) (pdf) (769.1 KB)


Examples of heavy information obligations and the related processes

The following table presents examples of individual heavy information obligations and the related processes in priority areas.


Priority area

Information obligation


Employers’ obligations

Duty to retain information on health €150m, mandatory monthly report to pension insurance companies €93m



Taxation

Taxation of business profits €185m, value-added tax €160m


Financial reporting

Auditing €96m, verification of accounting entries €61m, compilation of financial statements €53m


Environmental permits

Continuous monitoring and annual reporting in compliance with environmental permit €170m


Food safety and quality

Records of own verification €34m


Public procurement

Drawing up of written tender, €9.4m, for which preparing a description and formulation of price factors imposes the heaviest burden, at €3.9m etc.


Statistics (incl. Intrastat):

Intrastat statistics for Customs €10.5m, data collection for Statistics Finland €7.1m


Agricultural subsidies

Application for farming subsidies: farm subsidy form, subsidy application form, farmer block and agricultural parcel forms €6.7m








Page last updated: 08.05.2012
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