Business red tape to be cut by 25%

PLANS are in place to cut the red tape burden on Irish businesses by 25%, saving firms €500 million a year.

The rationale for the proposal by the Department of Enterprise, Trade and Employment is in response to a request from the EU Council to all member states to reduce the administrative burdens on business.

It will also ensure Irish companies are not at a competitive disadvantage vis-à-vis other EU countries, according to the department.

Red tape refers to the cost of form filling, applications, returns, surveys imposed on business by government regulations.

Enterprise Minister Micheál Martin is instructing all government departments identify, measure and reduce administrative burdens, in line with the process set out in a document entitled “Process for Achieving the Target”.

The department stresses however that Ireland is not a heavily regulated economy.

The World Bank Report “Doing Business 2008” ranks Ireland at eight out of 178 countries in terms of ease of setting up and running a business.

Also, the Heritage Foundation/Wall Street Journal Index of Economic Freedom ranks Ireland third out of 157 countries.

The report states: “Ireland has high levels of business freedom, investment freedom, financial freedom, property rights, and freedom from corruption. Government regulation is light.”

The 25% reduction target is intended to take into account reductions introduced since 2004 and is to be achieved by 2012.

Departments must also measure the savings from reductions in administrative burdens from January 2004 to date and estimate savings from planned changes in the period to 2012.