“Over 500 proposals regarding a reduction of the administrative burden on businesses have been made to the Council for Efficiency and Economic Growth. Today, the first proposals reached the government to decide on,” said Prime Minister Kristen Michal. “For example, we will abolish some of the unreasonable occupational health requirements, which in practice do nothing to ensure occupational health. Currently, the employer is obliged to check the ladders once a month; it would be reasonable to check them according to the frequency of use. Second, we will abolish notary fees when transferring a home loan from one bank to another. We are doing away with the alcohol register, which was set up 30 years ago and which will save businesses 5 million euros a year. The work is in full swing, with new decisions coming next week.”
Eliminating outdated requirements in the occupational health and safety field
A total of 68 proposals for simplification in the field of occupational health and safety were received from the representative organisations of employers, the Estonian Chamber of Commerce and Industry, and the Estonian Employers’ Confederation. Today, the Government supported 25 of them.
The remaining proposals will be further analysed by the Ministry of Economic Affairs and Communications. A number of them will require more in-depth discussions with other stakeholders, as well as with the council of entrepreneurs, and will be further addressed before autumn. The changes are mainly aimed at reducing the administrative burden for employers and the Labour Inspectorate.
“We have been careful to ensure that the changes do not jeopardise the well-being of workers and a healthy working environment,” stressed Erkki Keldo, Minister of Economy and Industry. “We are abolishing outdated requirements, such as the obligation for a one-person business to designate themselves as a first aid provider or to designate first aid providers in a hospital.”
Simplifying the refinancing of home loans
The government decided to cut the red tape and costs for refinancing home loans and supported the changes that simplify transferring loans from one bank to another.
For example, if a client wants to switch banks to lower the interest rate on a home loan, they will not have to re-certify the mortgage or other collateral with a notary if the loan terms do not become less favourable.
“In the future, it will no longer be necessary to go to a notary to have the mortgage restated to transfer a home loan from one bank to another. If the terms and conditions of the contract do not change, and only the bank in whose favour the mortgage is established changes, there will be no cost of going to a notary,” said Minister of Justice and Digital Affairs Liisa Pakosta.
The role of a notary is to protect the borrower by explaining the risks associated with the loan and collateral. If the refinancing of the loan simply lowers the interest rate and does not add any new obligations or collateral, the borrower does not need any additional protection as the situation does not become riskier for them.
Minister Pakosta pointed out that, in addition to increasing competition between banks and options for consumers, the consumer saves a significant one-off cost of a home loan when refinancing it by abolishing the requirement to notarise. “For example, when refinancing a home loan of 150,000 euros, the notary fee is 275 euros, according to Eesti Pank, which will not be charged in the future when the loan is transferred from one bank to another,” Pakosta said.
The government has already supported a proposal by businesses to abolish the requirement for a valuation report when refinancing home loans. The government submitted a respective draft to the Riigikogu a few weeks ago. By not preparing a valuation report, the person switching banks when refinancing a home loan will save at least 280 euros.
Abolishing the alcohol register
The government supported a proposal of businesses to abolish the alcohol register, which was set up in 1994 and used to ensure that only alcohol of laboratory-tested quality reached the market. Today, the information of the alcohol register is only used by the Tax and Customs Board, which can access the register information also in other ways by changing its work.
Alongside the abolition of the register, the state is reviewing how alcohol compliance checks could be carried out in the future. Currently, a producer, importer, or distributor of alcohol has to apply for a register entry for each product. To make the entry, a state fee must be paid and an electronic or paper application submitted together with a laboratory test report, samples of the label, and a customs declaration.
Minister of Regional Affairs and Agriculture Hendrik Johannes Terras said the decision was a clear signal from the government to support entrepreneurship. “The abolition of the alcohol register is a concrete measure that directly responds to the needs of entrepreneurs and will significantly reduce bureaucracy and broaden the future prospects of businesses,” said Terras.
By abolishing the alcohol register, businesses will be able to come to market with new products faster and at a lower cost. One laboratory test costs 200–500 euros and is carried out by two institutions in Estonia. If we take the maximum price of 500 euros, the total cost of laboratory tests in 2023 might have been up to 5.1 million euros.
In 2023, 10,190 products were entered in the alcohol register, 3,061 registrations were renewed, and 330 businesses applied for register entries.
In total, the Government has supported or already implemented 38 proposals of businesses to date.
The proposals of the Council for Efficiency and Economic Growth have been published on the website of the Government Office at https://www.riigikantselei.ee/majanduskasvu-noukoda
