SMEs: Tax advisors demand bureaucracy reduction

In a survey conducted by Datev, tax consultants are calling for tax cuts and a massive reduction in bureaucracy to ease the burden on small and medium-sized businesses. Their daily experiences in their firms are worrying.

This article is part of the special feature on bureaucratic madness in the skilled trades.

"Bureaucratic hurdles must be reduced, tax and levy relief implemented, and investments made in infrastructure to support German SMEs." This is the conclusion of a recent survey conducted as part of the Datev Industry Barometer.

Even though tax advisors are cautiously optimistic about the current situation of small and medium-sized enterprises (SMEs), forecasts for business development in the first half of 2025 are more subdued. Furthermore, tax firms are observing an increasing number of business closures, which are not only due to a lack of liquidity and profitability, but also to factors such as a shortage of skilled workers or a lack of succession planning. In the past twelve months, an average of around five clients of each tax consulting firm have ceased operations.

"The daily experiences are worrying"

"The daily experiences of tax advisors are worrying for Germany as a business location," says Datev CEO Prof. Dr. Robert Mayr. "We urgently need bureaucratic and tax relief for small and medium-sized enterprises (SMEs), which are the largest employers and the backbone of the German economy. Politicians must act quickly so that this backbone can continue to keep the German economy running in the future."

According to their tax firms, the three biggest economic risks for companies are the personnel situation (keyword: shortage of skilled workers) at 82 percent, over-regulation and bureaucracy (80 percent) and rising labor costs (68 percent).

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Currently, positive assessments still prevail regarding revenue, order backlog, and liquidity . However, law firms are skeptical about the next six months, with a predominantly negative outlook. Only regarding expected revenue growth and new orders are the responses to the assessment of the situation roughly balanced, they say.

Consultants are particularly skeptical about the future regarding costs and personnel . 71 percent rate the anticipated staffing situation of companies negatively, 59 percent see personnel costs as problematic, and 57 percent view general operating costs as problematic for the next six months. They are also rather cautious about planned company investments.

Source: Datev eG

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