Administrative burden for businesses reduced by €1.35 million
The Ministry of the Economy and Innovation has calculated that the administrative burden on businesses was reduced by €1.35 million last year. It has also now started to estimate how much it will cost businesses to adapt to new regulatory requirements, which will amount to €1.9 million in 2023.
"Effective and proportionate regulation is directly linked to our country's competitiveness. And while the burden has fallen by €30 million over the last four years, we need to do more to reduce barriers and increase opportunities for business. That's why we have introduced a new indicator - the cost of adapting to regulation - to see the reality of the situation," said Aušrinė Armonaitė, the Minister of the Economy and Innovation.
Adaptation costs increased by €1.9 million in 2023, accounting for the majority of the total burden - up to 79%. Adaptation costs include investments and costs for acquiring the necessary tools and organising the processes, i.e. buying new equipment, training staff, etc.
"Regulatory adaptation - hiring staff, the need to acquire tools - represents the lion's share of the total costs incurred by a company. We have made recommendations and urge public authorities to pay special attention to these costs of regulatory adaptation when drafting legislative amendments and to look for more business-friendly solutions," said Ieva Valeškaitė, the Deputy Minister of the Economy and Innovation.
In 2023, only 2 out of 44 institutions - the Ministry of the Economy and Innovation and the Ministry of the Environment - reduced their regulatory adaptation costs. The Ministry of Economy and Innovation reduced the adaptation costs the most (€137,000 less), while the State Tax Inspectorate (STI) increased them the most (€1.9 million more).
One of the Ministry of the Economy and Innovation's projects that reduced overall expenditure was the draft amendment to the Food Act. This amendment provides that food that is safe and fit for consumption may be sold after the minimum expiry date indicated on the 'best before' label. This will reduce the cost of food disposal.
The most significant contributor to the increase in adaptation costs in 2023 is the EU origin legislation - the Order of the Head of the State Revenue Service approving the rules for the collection, storage and reporting of data on international payment transactions. These changes increased adjustment costs by EUR 1.9 million, as IT systems for data submission and information storage need to be adapted.
The Ministry of Health had the largest decrease in administrative burden last year (a decrease of EUR 873 thousand) and the Ministry of Energy had the largest increase (an increase of EUR 647 thousand). The administrative burden relates to information obligations such as the preparation and submission of reports.
The most significant reduction in administrative burden is the amendment to the Health Care Act prepared by the Ministry of Health, which stipulates that a patient may consult other primary health care professionals in addition to doctors for personal health care services. Similarly, when referring to specialists, the patient will be able to provide a referral from other health professionals in addition to doctors. These changes reduce the administrative burden by €483,000.
The most significant increase in administrative burden is the amendment to the Heat Act, which introduces the obligation for heat suppliers to prepare a ten-year investment plan for the development of the heat economy and submit it to the relevant municipal authority for approval. The plan has to be updated at least every 3 years. This legislation increased the administrative burden by EUR 642 thousand.
Following a detailed analysis, the Ministry of the Economy and Innovation has made recommendations to the authorities to help them avoid excessive regulatory burdens and remove the obstacles that currently exist.
This year, the Ministry also plans to further strengthen its institutional capacity to assess and reduce regulatory adjustment costs. With more than 1,200 staff from public authorities and municipalities having participated in the training in 2023, it is planned to continue this training and sharing of best practices.