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Assessment of the effect of regulations on the economy

The effect of regulations on the economy, especially on small and medium-sized enterprises, is assessed in the test for small and medium-sized enterprises (SME test). The purpose of the test is to increase awareness of the qualitative and quantitative effects of regulations on the economy and consequently reduce the negative effects on the economy.

Test for small and medium-sized enterprises

The test for small and medium-sized enterprises (SME test) is prepared by ministries in in the process of legislative drafting with the aim of selecting optimal measures from the point of view of their effect on the economy, especially small and medium-sized enterprises, and increasing the transparency of legislation.

In addition, it is intended for the interested and general public, who can check the effect of a proposed regulation on the economy, as the SME test is published together with the proposed regulation on the eDemokracija portal.

The SME test measures the following effects of regulations on the economy: 

  • quantitative effects: direct costs (such as taxes, contributions, fees) and indirect costs (actual indirect costs and administrative costs).
  • quantitative effects on the legal certainty, working conditions of employees, competition, undeclared work and grey economy, productivity, investments in research and development, internationalisation.

The SME test draws the attention of regulation drafters to the systematic integration and evaluation of options specific for small enterprises, such as:

  • the application of partial or at least temporary exemptions for small enterprises if a total exemption would nullify the purpose of the regulation;
  • longer transitional periods for adaptation;
  • streamlining administrative activities (e.g. audits), accounting burdens and reporting requirements;
  • reduced fees, tax reliefs and similar forms of privileged approach for small businesses;
  • ability to interact with the government and take care of administrative tasks in electronic form.