Bureaucracy Reduction Does Not Reach the Economy Businesses Demand Quick Implementation of the Tax-simplification Reform
Thus far, the government program “Bureaucracy reduction and better law-making” has not led to substantial bureaucratic relief for businesses. Such is the result of a representative company-survey conducted by IW-Consult, a subsidiary company of the Institute for the German Economy (IW) in Cologne. The survey was conducted in the name of the Initiative for a New Social Market Economy (INSM) and the magazine WirtschaftsWoche. Subject of the survey were 760 companies from the industrial- and the industry-related service sector. Two thirds of the respondents were not able to report any bureaucratic relief as a result of the government reform. On the contrary, one third declared that the reform had led to more stresses and strains.
Currently, as a matter of fact, few businesses register any sort of bureaucratic relief. Most reports of actual improvements originate from the manufacturing sector whereby those companies that did report improvements make up a mere two percent of the interviewees. The INSM chief executive Hubertus Pellengahr declares: “The study shows: Bureaucracy reduction has not filtered down to the company level yet. On the contrary, many businesses complain that the reform has created additional strains. The bureaucracy hydra has yet to be slain.” For 2011, it is the self-set goal of the federal government to reduce the financial strain that information obligations create for businesses by 25 percent as opposed to 2006.
Currently, businesses from the industrial- and the service-sector only expect moderate alleviations as a result of the “law for tax-simplification 2011”. The bill was endorsed by the cabinet in February 2011. Nonetheless, two thirds of the interviewed companies would support a quick implementation of the tax-simplification measure.
Most notably, the companies believe that they will benefit from simplified obligations of proof vis-à-vis the financial authorities. More than half of the respondents view this as a positive, albeit marginally helpful step. 27 percent do not expect a relief of bureaucratic strain. Furthermore, businesses welcome the intention to simplify the requirements companies have to fulfill with regards to electronic accounting in value-added tax related matters. More than 40 percent of interviewed companies believe that this will at least partially reduce bureaucratic strain while 30 percent do not believe this to be the case. 12 percent even expect this to lead to higher workloads.
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