1 QUALITY IMPROVEMENTS IN CROATIAN BUSINESS REGISTER AND IMPLICATIONS OF REVISION OF NACE Prepared by Zrinka Pavlović and Dubravka Celić Geneva, June 2007

2 Contents Introduction Introduction Units in the SBR Units in the SBR Coverage Coverage Sources of the SBR Sources of the SBR Updating of the SBR Updating of the SBR Implications of revision of NACE Implications of revision of NACE

3 Introduction Register of Business Entities – since 1976 Register of Business Entities – since 1976 Project of establishing the Statistical Business Register started with the Twinning project with Statistics Denmark and Statistics Sweden in 2003 Project of establishing the Statistical Business Register started with the Twinning project with Statistics Denmark and Statistics Sweden in 2003 The first version of the SBR was set up in 2004 The first version of the SBR was set up in 2004Goals: Meeting the demands from the users inside the CBS Meeting the demands from the users inside the CBS Complying with EU regulations concerning business registers for statistical purposes Complying with EU regulations concerning business registers for statistical purposes

4 Starting point - Register of Business Entities – administrative register - used for statistical purposes but with many drawbacks - Data collected in the Pilot business census that covered around 5000 businesses - A number of administrative sources with possibility to be used in the SBR

5 Units in the SBR Legal units Legal units –transferred from administrative sources Enterprises Enterprises –linked to the legal units by one-to-one connection Local units Local units –compiled from administrative sources, contact with the enterprise, from Internet, etc.

6 Coverage Legal persons and government bodies Legal persons and government bodies Crafts (sole proprietors) Crafts (sole proprietors) Free lances – not yet covered Free lances – not yet covered

7 Sources of the SBR (1) Basic administrative sources Register of Business Entities (RBE) Register of Business Entities (RBE) - For legal persons and government bodies Central Register of Crafts (CRC) Central Register of Crafts (CRC) - For natural persons - crafts

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9 Sources of the SBR (2) Other administrative sources –Financial Agency (FINA) data on employment, data on employment, net turnover net turnover activity status activity status –Tax Administration (TA) data on activity status, data on activity status, activity codes for crafts activity codes for crafts number of employees for crafts and legal persons not found in FINA data base number of employees for crafts and legal persons not found in FINA data base

10 Sources of the SBR (3) Statistical sources - Results from the pilot SBS survey for construction 2005 (900 units needed correction of the main activity codes) - Feedback from 2006 Annual reports on gross fixed capital formation in fixed assets - Other SBS surveys (distributive trade in 2006 and industrial production in 2007) are planned to be used for improving the quality of SBR data

11 IV. Updating of the SBR The SBR is updated from administrative and statistical sources: SourceFrequencyVariable Register of Business EntitiesMonthly Births Deaths Changes of name, address, activity code, legal form, etc. Central Register of CraftsSemi-annually Births Deaths Changes of name, address, etc. Financial AgencyAnnually Activity status Net turnover Employment Tax AdministrationAnnually Activity status Activity codes for crafts Employment SBSAnnually Change of the activity code

12 V. Implications of revision of NACE 1.Reclassification of units in the RBE 2. 2.Improving the quality of the registered activity codes 3.Sending the notification about the new code to the companies 4.Taking over main activity codes into the SBR

13 1. Reclassification of units in the Register of Business Entities Updating activity codes in both RBE and SBR Updating activity codes in both RBE and SBR No survey No survey Statisticians involved Statisticians involved Automatic recoding for 1:1 and n:1 cases Automatic recoding for 1:1 and n:1 cases Manual recoding for 1:n and m:n cases - only for units with >=10 employees, Manual recoding for 1:n and m:n cases - only for units with >=10 employees, other units – automatic recoding using correspondence tables

14 2. Improving the quality of the registered activity codes Updating of the RBE activity codes happen quite rarely on the demand of the company, exceptionally on the request of the statisticians Updating of the RBE activity codes happen quite rarely on the demand of the company, exceptionally on the request of the statisticians Correcting the old and incorrect codes will be combined with reclassification according to the new NACE Rev 2 codes Correcting the old and incorrect codes will be combined with reclassification according to the new NACE Rev 2 codes

15 3. Sending the notification about the new code to the companies Active units will be informed about newly assigned main activity code Active units will be informed about newly assigned main activity code Opportunity for the company to react if new code does not comply with actual activity Opportunity for the company to react if new code does not comply with actual activity

16 4. Taking over main activity codes into the SBR Newly assigned codes of legal units in the RBE will be taken over into the SBR Newly assigned codes of legal units in the RBE will be taken over into the SBR New codes for crafts will be taken over from the Tax office since this is the main source for activity codes for crafts New codes for crafts will be taken over from the Tax office since this is the main source for activity codes for crafts Secondary activities of the enterprises will be recoded automatically as well as the activity codes for local units Secondary activities of the enterprises will be recoded automatically as well as the activity codes for local units Revision of a number of such automatically assigned codes in the next year quality survey that is planned to be carried out for the first time Revision of a number of such automatically assigned codes in the next year quality survey that is planned to be carried out for the first time It is expected that all work of implementing the new classification will be done by the end of the year. It is expected that all work of implementing the new classification will be done by the end of the year.

17 Future plans Coverage of units in the SBR will be improved by including the free lances. Coverage of units in the SBR will be improved by including the free lances. Preparations for including enterprise groups will be started. Preparations for including enterprise groups will be started. Using the results from other SBS and statistical surveys for updating activity codes in the SBR. Using the results from other SBS and statistical surveys for updating activity codes in the SBR. Using other administrative sources for updating or adding the new data to the SBR and cooperation with currently used sources in improving their data quality. Using other administrative sources for updating or adding the new data to the SBR and cooperation with currently used sources in improving their data quality.

18 Conclusion Quality improvements of the SBR - continuing task and among the key priorities in Croatian CBS. Quality improvements of the SBR - continuing task and among the key priorities in Croatian CBS. Scarce resources (especially IT staff and funding for SBR surveys) are the major obstacle to bigger progress, but development of the Croatian SBR is steadily going on in fulfilling the task that is primarily finding the way to meet the users' needs. Scarce resources (especially IT staff and funding for SBR surveys) are the major obstacle to bigger progress, but development of the Croatian SBR is steadily going on in fulfilling the task that is primarily finding the way to meet the users' needs.

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