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Administrative burdens in Belgium in 2004 (13/03/2006)

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In response to the Council of Ministers and in collaboration with the Dienst voor Administratieve Vereenvoudiging/Agence pour la Simplification Administrative, the FPB has estimated the cost of the administrative burden for companies and self-employed persons in 2004. The estimation of the administrative burden is based on a national survey and uses the same methodology as the one used in the surveys carried out for the years 2000 and 2002. Businesses are invited to make their own assessment of the administrative burden imposed by three areas of legislation: environmental, employment and tax legislation. The Planning Paper analyses the results of the 2004 survey and compares them with the results of the two previous surveys.

The administrative burden on companies, based on their responses, is estimated to cost EUR 4.9 billion, or 1.7% of GDP, and the estimate based on the responses from self-employed persons amounts to EUR 2.4 billion, or 0.8% of GDP. In comparison with the 2002 survey, the administrative burden is declining for both companies and self-employed persons and only because of lower in-house administrative burdens.

Tax legislation is perceived by companies and self-employed persons as creating the biggest share of the total estimated administrative burden. The share of the administrative burden associated with employment legislation has been rising between 2002 and 2004.

Concerning the most time-consuming forms, companies and self-employed persons indicate VAT as the number one for tax legislation and forms linked to regional competencies as the number one for environmental legislation. Among employment forms, companies underline wages and compensation forms as the most time-consuming.

As in previous surveys, small businesses (with less than 10 employees) face the highest administrative burden, expressed as a percentage of turnover and per employee. However, with an annual average cost per employee estimated to be a little less than EUR 6,000, small businesses have recorded the largest relative decrease in their administrative burden. In addition to this quantitative analysis, the survey also has a qualitative part in which business sentiment is analysed on issues relating to the quality of legislation, of contact with the administration and to the process of administrative simplification.

Companies and self-employed persons are generally more satisfied with their contact with the administration than with the quality of legislation. For all areas of legislation, companies and self-employed persons are relatively satisfied with the public information that accompanies legislation. Lack of adaptability of the legislation is the most criticised aspect of legislation, with the exception of tax legislation for companies. Indeed, for companies, tax legislation is perceived as constantly improving in terms of the quality of the legislation as well as the quality of contact with the administration. However, a general decrease in the quality of contact with the environmental administration is mentioned by self-employed persons.

The degree of knowledge of the administrative simplification initiatives follows a size effect: small firms know these initiatives less well than larger firms, and self-employed persons, particularly in the agricultural sector, know them less well than companies. The best-known initiative is the generalisation of the single business number and the Crossroads Bank for Enterprises (CBE). For companies, the second best-known initiative is Dimona and for self-employed persons it is Tax-on-web.

Dimona and the generalisation of the single business number and the CBE are the two initiatives used the most by companies, in particular by medium and large enterprises. The level of satisfaction associated with the use of these two initiatives is globally high even if companies express a higher level of satisfaction for two other initiatives: the withdrawal of visa and account books and the simplification of information requirements and rules for calling the shareholders assembly. Companies are usually less satisfied with electronic simplifications in the area of tax than in the area of employment.

Self-employed persons are very satisfied with the initiative of the generalisation of the single business number and the CBE. The levels of satisfaction reached with the other initiatives depend strongly on the sector of activity.

Finally, concerning the proposed administrative simplifications, enterprises firstly support the project of statistics simplification. Self-employed persons prefer the proposal for the simplification of permit requests.

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