The countless bureaucratic hurdles present businesses with almost insurmountable challenges, says the Federal Council. (Photo: © sergeyback/123RF.com)
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1 May 2024
The Federal Council has taken a position on the Bureaucracy Reduction Act IV and is proposing further measures to specifically ease the burden on small and medium-sized businesses. The skilled trades sector recognizes "important impetus" but calls for "more political courage" to reduce bureaucracy.
"Germany is falling further and further behind in international competition . The main reason for this is the countless bureaucratic hurdles that pose almost insurmountable challenges for businesses." In its position paper on the Sixth Bureaucracy Relief Act (BEG IV), the Federal Council makes it clear that the bureaucratic burden threatens the existence of many businesses and risks slowing down the economy as a whole. Too little is being done so far to provide genuine relief for businesses.
While the measures in the draft law are a step in the right direction, they fall far short of the demands in this area . "Germany is at best catching up to other nations that are years, if not decades, ahead in this respect," the Federal Council stated. "The draft law merely picks out individual, sometimes only moderately relevant, areas of law and deregulates them minimally . The necessary fundamental change hoped for by practitioners is thus not forthcoming ."
More is needed to get the German economy back on track. Deregulation, administrative simplification, and acceleration of administrative processes must be considered on a larger and more comprehensive scale . "Retention periods must be drastically shortened for all accounting documents, not just those required under commercial and tax law . Germany needs a significant reduction in existing documentation, verification, and supervisory requirements across all sectors , and above all, no new regulations ."
Thresholds for company size in labor and social security law need to be simplified and harmonized to finally provide sustainable relief for small and medium-sized enterprises (SMEs). These businesses, in particular, suffer from the continuously increasing bureaucratic requirements. Despite a clear commitment to significantly reducing bureaucracy, the Federal Council largely supports the Federal Government's draft legislation on the fourth phase of the SME reform (BEG IV) unchanged and does not foresee any major alterations to the measures relevant to the skilled trades.
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The Federal Council, for its part, has been too hesitant on the issue of reducing bureaucracy. Holger Schwannecke , Secretary General of the German Confederation of Skilled Crafts (ZDH), would have liked to see "more political courage" from it as well. "Instead of supporting the Federal Government's proposal to shorten the retention periods from ten to just eight years, the states would have been well advised to follow the recommendation of the Economic Affairs Committee and decide on a reduction from ten to six years. That would have noticeably relieved the burden on craft businesses."
However, the Federal Council's resolution specifically on reducing bureaucracy for small and medium-sized enterprises (SMEs) is welcome . Schwannecke stated: "The proposed abolition of the requirement to keep annual financial statements in paper form or the automated notification of sick leave to employers by health insurance funds are just a few of the right measures for effectively relieving the burden on skilled trades . The Bundestag is urged to take up the Federal Council's proposals and implement them as part of the Fourth Bureaucracy Relief Act ."
The motion for the resolution originated in Schleswig-Holstein . From the perspective of the German Confederation of Skilled Crafts (ZDH), the resolution calls for " important measures to relieve the burden on craft businesses." This applies particularly to the proposal to simplify the process for issuing electronic sick leave certificates . Furthermore, the Federal Council, as suggested by the skilled crafts sector, recommends examining the possibility of health insurance funds automatically sending the certificates to the respective employers. In addition, the Council calls for the abolition of paper requirements for annual financial statements under commercial and tax law.
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