IMPACT OF CHANGES IN THE SIMPLIFIED TAXATION SYSTEM ON BUSINESS ACTIVITIES

Abstract

The simplified taxation system plays an important role in the development of entrepreneurial activity in Ukraine, as it creates a favorable tax environment for small and medium-sized businesses. Its application allows business entities to reduce tax pressure, optimize accounting and tax reporting, and conduct business activities within the legal framework without excessive administrative costs. The simplified taxation system functions as a special regime based on replacing a set of tax payments with a single tax. The system's priority is to support small businesses by minimizing their tax burden. The effectiveness of this mechanism is ensured through the performance of a range of functions, from fiscal and regulatory to stimulating and social. At the same time, constant changes in taxation rules, increased fiscal pressure, and expanded requirements for taxpayers create significant risks for business. These challenges are exacerbated by the war and the economic downturn, which necessitates a detailed study of how the transformation of the simplified system affects entrepreneurship. In order to improve the effectiveness of the simplified taxation system, a comprehensive modernization of the tax environment is needed, focused on supporting and developing small and medium-sized businesses. To ensure the effectiveness of the simplified taxation system, it is necessary to create a stable tax environment for small and medium-sized businesses. The key step should be the stability of legislation: rules should be predictable, changes should be rare, and transition periods should be introduced to allow entrepreneurs to adapt to new conditions. Adapting the simplified system to the needs of small businesses and the realities of the crisis will bring the economy out of the shadows. This will encourage entrepreneurs to be more active and make the national market more attractive to investors. Simplified taxation is an effective tool for stimulating entrepreneurship in Ukraine. Minimizing the tax and administrative burden within this system contributes to the de-shadowing of the economy and the strengthening of financial discipline among business entities.