Estonia to reduce bureaucracy for businesses

TALLINN - The Estonian government tasked 22 state agencies on Thursday with prioritizing the readiness for automatic data exchange in IT development, enabling businesses to reduce reporting burdens by up to 90 percent.

The approved plan for automatic data exchange aims to simplify data submission for businesses and reduce bureaucracy. Once the necessary IT developments are implemented in both the public and private sectors, data submitted to the government will be automatically shared with the required agencies.

"Today, we made decisions in the economic Cabinet on how to advance real-time economy in Estonia, allowing businesses and citizens to manage their affairs with significantly less cost and effort," Prime Minister Kristen Michal said.

"By simplifying the most common economic reporting formats, we can save countless working hours and a lot of money. If these plans are realized, we will save hundreds of millions of euros, making it a gain for Estonians and setting an example for the world."

Currently, various state agencies require over 400 reports from businesses, containing more than 60,000 data fields, with duplicate data submissions being common. By standardizing reporting data and enabling automated machine-readable submissions, duplication can be reduced by up to 90 percent. By the end of the year, 70 of the 400 reports will be standardized, cutting data fields from 3,000 to just 81.

Switching to data-driven reporting is expected to save businesses 132 million euros and the government 1.7 million euros over five years for reports like annual financial statements, VAT declarations, and income and social tax declarations.

To support the transition to automatic data exchange, 12.5 million euros have been earmarked in the state budget for this purpose through 2027. Additionally, businesses will receive subsidies to facilitate the shift to data-driven reporting.