Analysis of the impact of tax rates and privileges on the accounting of small and medium-sized enterprises in Ukraine: Challenges and opportunities

The aim of the study was to analyse the impact of tax rates and privileges on the accounting of small and medium-sized enterprises in terms of existing challenges and opportunities. The tools used were SWOT-analysis, PESTEL-analysis and the case of small and medium-sized farms, which are one of the key sources of national gross domestic product. The analysis revealed a downward trend in the number of small and medium-sized enterprises, which account for more than 99% of all enterprises in the country and employ 81.5% of the total employed population. Since February 2022, about half of small and medium-sized enterprises have ceased operations and another quarter have relocated to other parts of the country or abroad. The temporary reduction of the tax burden on such enterprises to support their sustainable development during the first year of the full-scale invasion had a positive effect. However, the reintroduction of pre-war tax regulations in 2023 significantly worsened their economic condition and became an obstacle to stable development. As of 2024, the majority of small and medium-sized enterprises use the simplified accounting and taxation system, which, however, has drawbacks, including limited eligibility for the simplified taxation system and lack of certainty regarding the calculation of the income threshold for third group enterprises after the termination of the martial law regime. Despite these shortcomings, the system has had a positive impact on the activities of small and medium-sized enterprises, 76% of which declare their readiness for further growth. In order to maximise the benefits of the changed accounting and taxation system, the study offered recommendations to enterprises to seek assistance in choosing a type of activity to reduce the fiscal burden, reorganise the accounting department through outsourcing, and continuously analyse business activities to identify and optimise the effects of accounting