ANALYSIS OF THE RESULTS OF TAXATION OF SMALL BUSINESSES

The taxation of small enterprises plays a significant role in shaping a country’s economic environment, as it directly affects entrepreneurial activity, fiscal discipline, and the generation of budget revenues. This paper examines the impact of tax policies applied to small businesses, emphasizing their effectiveness, existing challenges, and influence on sustainable economic growth. Small enterprises are usually covered by simplified taxation systems and various fiscal incentives that aim to reduce administrative complexity and encourage development. Nevertheless, despite these supportive measures, a number of difficulties remain. Among them are the limited legal awareness of entrepreneurs, frequent amendments to tax legislation, and persistent obstacles in fulfilling reporting requirements. The findings indicate that simplified tax regimes contribute to an increase in voluntary tax compliance and a reduction in informal economic activity. However, these systems are not entirely flawless. Many business owners face challenges in understanding and adapting to changing tax norms, which sometimes results in reporting mistakes or late payments. Furthermore, the interaction between tax authorities and small taxpayers is often insufficiently transparent, leading to misunderstandings and penalties that may discourage entrepreneurial motivation. The research also underlines the need to modernize tax administration through digital transformation and improved taxpayer education. The introduction of electronic declaration and payment systems has enhanced tax collection efficiency and minimized human errors. Yet, a considerable proportion of small businesses still make limited use of such technologies. Therefore, establishing a more stable and predictable legal environment and expanding awareness programs remain crucial for improving compliance and competitiveness in the small business sector. In conclusion, an effective small business taxation policy should maintain a balance between securing public revenues and stimulating entrepreneurial growth. To achieve this, policymakers are encouraged to simplify procedures, strengthen legal clarity, and promote constructive dialogue between tax authorities and taxpayers. Such an approach will help create a more transparent, supportive, and sustainable tax environment for small enterprises.