Directions for Reforming the Simplified Taxation System in Ukraine

The article considers the specifics and features of the application of a simplified tax system in Ukraine and the directions for its reforming in accordance with the modern conditions of the small business development. The pros and cons of the simplified system in today’s environment are considered. Four groups of single tax payers are described, depending on the level of annual income, the number of employees and the legal rates. The role of the single tax in the formation of local budget revenues is researched. It is noted that the fixed rates of this tax are set by rural, town and city councils. The main threats that hinder the efficient conduct of business are identified. An analysis of the dynamics of single tax revenues to local budgets during 2015-2019 is carried out and it has been identified that the largest share of this tax comes from self employed persons. The general reasons for hiding the real incomes of entrepreneurs and ways to eliminate them are considered. The major legislatively sound reforms are analyzed: new limits for self employed persons and the introduction of payment transactions recorders. Some changes and delays in the legislation in connection with the coronavirus pandemic (COVID-2019) are indicated. It is substantiated that the increase in the number of entrepreneurs in the sphere of small business and the growth of tax revenues from their activities are possible only in the implementation of a comprehensive reform by the State authorities, which will include sufficient government support. The main directions for improvement of national legislation in the context of a simplified tax system to stimulate the development of entrepreneurship and the economy of Ukraine are proposed.