Shapovalova A.K., Finogeeva O.V., Burlakova O.N.

Oles Honchar Dnipropetrovsk National University, Ukraine

PROBLEMS AND DEVELOPMENT OF SMALL BUSINESS PROSPECTS IN UKRAINE

Analyzing the modern conditions of doing business in Ukraine, we can say about the development prospects of large enterprises and the priority of the functioning in the market of big business. At a time when small business is under the tax pressure in conditions of unfavorable competition and it has the lack of protection from the state’s side.Such a provision of small- and medium-sized business can lead to a curtailment of its activities through further shadowy.

The modern economic system requires striking the right balance between big and small businesses. In a market economy, small business also performs a number of important social and economic functions: small business plays a significant role in the development of trade, services, public catering, consumer goods, it also promotescompetition, but it is against monopolistic tendencies; small business creates a greater share of goods in the economy; it helps to solve the employment problem, meets the specific needs of consumers, generates individual demand, contributes significantly to the scientific and technical progress, provides the basis for the development of medium and big businesses in the future, as well as softens the economic crisis, supports social and political stability, states the democracy in business, and so on. However, medium and small businesses have many advantages in comparison with big business, such as: a high maneuverability, flexibility with respect to market conditions, the propensity to produceinnovations and so on.

The quantity of the subjects of small business in Ukraine has officially exceeded the average European level. According to Goskomstat, per thousand of Ukrainian peopleaccount for 80 small businesses. Thus, the number of enterprises is growing, but the qualitative indexes are disturbing. Among real trouble and concerns of small business inUkraine are the following:

· lack of government support;

· lack of development of financial market sources;

· the shadow economy. Small businesses always use more practice work without registration of contracts, as well as trying to transfer their operations to cash flow to minimize tax;

· administrative barriers, a large number of laws, regulations and instructions;

· the limited domestic demand and the availability of the sales crisis on the domestic market;

· low investment activity, instability hampers entrepreneurs from investing;

· lack of development of the leasing and franchise significantly narrows the range of business financing.

The pressing question is the question about tax policy in the sphere of the small and medium-sized businesses. The current state tax policy is without proper legislative andregulatory support. Following the publication of the Tax Code, which entered into force on January 1, 2011, about 80% income of an enterprise is withdrawn in the form of varioustaxes and fees. The current tax system does not allow enterprises to invest and also it creates optimum conditions for their work in the informal sector.

The settlement of specific problems and setting strategy of small business development in Ukraine are possible after the implementation of several large-scale measures:

• taking into account the protests of private entrepreneurs, the tax situation requires changes immediately. It is necessary to make some reforms in the tax system and to complete the tax code: to reduce the tax burden by reducing payroll taxes, VAT, customs duties on imported products, to reduce the amount of taxes and various fees, to turn the tax system into a stimulating factor of the development of small business.

• it is advisable to introduce preferential tax profits of commercial banks, received from lending to small businesses.

• among forward-looking measures of the state support, one of the main places must take a financial assistance, which provides for the granting of soft loans, its guarantee, the establishment of public funds and specialized financial institutions, and the like. Today in Ukraine there are several lines of credit. However, very few domestic small businesses can take advantage of their credits. Funds are very limited, most small businesses are not able to provide valuable security and fulfill the other requirements of lenders.

• other areas of assistance should include: information support, advisory services and staff assistance, the creation of databases about markets and companies, supporting funds, the support for innovation activities, placement of orders among small businesses, the promotion in co-operation of big and small businesses, the promotion of foreign trade activities of small business, providing development programs of specialized equipment for small business, development programs and support of small business.

State policy towards small and medium-sized businesses should be aimed at facilitating access to information and business consulting support as well as training areasrepresented by the business centers and business incubators, which give advice to small business on taxation, marketing, and also help in finding sources of financing as well aspartners abroad, preparation of business plans.

The formation of government policy in order to support small business, to identify the ways of its implementation should not only be "objective necessity" for a transition to the market, but also an integral part of a national doctrine of socio-economic reforms in Ukraine. It will lead to the formation of the middle class society, which is the basis of market reforms and the guarantee of the irreversibility of economic processes. Of course, small business can rely primarily on itself, its material and financial resources. In this case, state support assumes the character of encouragement. And it will be the main source of competitiveness and profitability.