SIMPLIFIED TAXATION SYSTEM: A RETROSPECTIVE OF CAUSAL RELATIONS OF THREATS TO UKRAINE'S TAX SECURITY
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Published:
Aug 13, 2025
Abstract
The Constitution of Ukraine regulates only one, single taxation system. The Constitution of Ukraine does not mention the plurality of taxation systems. However, by the Decree of the President of Ukraine dated 03.07.1998 No. 727/98, another taxation system was introduced – a simplified one, which was intended to facilitate business, in particular for small and medium-sized businesses. At the same time, in modern conditions, the simplified taxation system raises concerns about its impact on the tax security of the state. Tax security is a component of the country's economic security and provides for timely, full and stable receipt of tax payments to budgets of all levels. However, there is an opinion that the current mechanisms for the functioning of the simplified taxation system create certain gaps in the taxation system, which may contribute to tax evasion, reduce fiscal efficiency and threaten the stability of the budget system. In this regard, the need for a systematic review of the principles of the functioning of the simplified taxation system is becoming more urgent in order to ensure its compliance with the principles of tax security, which may include reforming or even eliminating this system.
How to Cite
Kolomiiets, P. (2025). SIMPLIFIED TAXATION SYSTEM: A RETROSPECTIVE OF CAUSAL RELATIONS OF THREATS TO UKRAINE’S TAX SECURITY. Baltic Journal of Legal and Social Sciences, (3), 27-34. https://doi.org/10.30525/2592-8813-2025-3-4
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Keywords
taxation system, taxes and fees, tax security of the state, economic security of the state, national security, budget system of Ukraine, small and medium-sized enterprises
References
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16. Pro rozvytok ta derzhavnu pidtrymku maloho i serednoho pidpryiemnytstva v Ukraini: Zakon Ukrainy vid 22.03.2012 [On the development and state support of small and medium-sized businesses in Ukraine: Law of Ukraine dated 22.03.2012]. № 4618-VI. https://zakon.rada.gov.ua/laws/show/4618-17#Text. [in Ukrainian]
17. Pro sproshchenu systemu opodatkuvannia, obliku ta zvitnosti subiektiv maloho pidpryiemnytstva: Ukaz Prezydenta Ukrainy vid 03.07.1998 [On a simplified system of taxation, accounting and reporting for small businesses: Decree of the President of Ukraine dated 03.07.1998]. № 727/98. https://zakon.rada.gov.ua/laws/show/727/98/ed19980703#Text. [in Ukrainian]
18. Ponomareva, T., & Hrynevich, K. (2020). Problems and ways to improve the simplified taxation system in Ukraine. Bulletin of V. N. Karazin Kharkiv National University Economic Series. (99), 50–56. doi: 10.26565/2311-2379-2020-99-05.
19. Riadinska V, Protsenko T, Kuznietsova O. (2021). Ways of the improvement of the simplified taxation, accounting and reporting system in Ukraine. Science and law enforcement. 142–154.
20. Synchak V.P. (2020). Special taxation mechanism in conditions of functioning of the simplified taxation system. Accounting and Finance. № 2 (88). 103–113.
21. Ukhvala Konstytutsiinoho Sudu Ukrainy pro vidmovu u vidkrytti konstytutsiinoho provadzhennia u spravi za konstytutsiinym podanniam 50 narodnykh deputativ Ukrainy shchodo vidpovidnosti Konstytutsii Ukrainy (konstytutsiinosti) Ukazu Prezydenta Ukrainy «Pro sproshchenu systemu opodatkuvannia, obliku ta zvitnosti subiektiv maloho pidpryiemnytstva»: Ukhvala Konstytutsiinoho sudu Ukrainy vid 16.01.2004 № 6-u/2004 [Resolution of the Constitutional Court of Ukraine on the refusal to initiate constitutional proceedings in the case based on the constitutional submission of 50 people’s deputies of Ukraine regarding the compliance with the Constitution of Ukraine (constitutionality)
of the Decree of the President of Ukraine «On a simplified system of taxation, accounting and reporting of small business entities»: Resolution of the Constitutional Court of Ukraine dated 16.01.2004 No. 6-у/2004]. https://zakon.rada.gov.ua/laws/show/v006u710-04#Text. [in Ukrainian]
22. Zakrevska, O (2022). Display of the simplified taxation system in the bas software product. International scientific journal «Internauka». Series: «Economic sciences». № 7 (63). 147–151.
23. 96/280/EC: Commission Recommendation of 3 April 1996 concerning the definition of small and medium-sized enterprises. https://eur-lex.europa.eu/legal-content/en/TXT/?uri=CELEX:31996H0280.
2. Association agreement between the European Union and the European Atomic Energy Community and their Member States, of the one part, and Ukraine, of the other part. Official Journal of the European Union. 29.05.2014. https://publications.europa.eu/resource/cellar/4589a50c-e6e3-11e3-8cd4-01aa75ed71a1.0006.03/DOC_1.
3. Calinescu, T.V. (2020). Use of the simplified taxation system by agriculture business. Time description of economic reforms. № 2. P. 45–51. doi: 10.32620/cher.2020.2.06.
4. Commission Recommendation of 6 May 2003 concerning the definition of micro, small and medium-sized enterprises (Text with EEA relevance) (notified under document number C(2003) 1422). https://eur-lex.europa.eu/legal-content/en/TXT/?uri=CELEX%3A32003H0361.
5. Council Recommendation of 21 June 2002 on the broad guidelines of the economic policies of the Member States and the Community (2002/549/EC). https://eur-lex.europa.eu/legal-content/EN/TXT/HTML/?uri=CELEX:32002H0549.
6. European charter for small enterprises. https://europa.rs/upload/documents/key_documents/EU%20SME%20charter_en.pdf.
7. Kolomiiets P.V. (2023). Kontseptualni aspekty pravovoho zabezpechennia podatkovoi bezpeky Ukrainy [Conceptual aspects of legal support for tax security in Ukraine: monograph.]. State Tax University. Irpin; Poltava: Publishing house of PP «Astraya», 468 p. https://api-ir.dpu.edu.ua/server/api/core/bitstreams/72729703-cf06-4219-934b-17f3f0dea3f2/content. [in Ukrainian]
8. Konstytutsiia Ukrainy: Zakon Ukrainy vid 28.06.1996 № 254k/96-VR [Constitution of Ukraine: Law of Ukraine dated 28.06.1996 No. 254k/96-VR.] Bulletin of the Verkhovna Rada of Ukraine. 1996. № 30. https://zakon.rada.gov.ua/laws/show/254к/96-вр/ed19960628#Text. [in Ukrainian]
9. Natsionalna stratehiia dokhodiv do 2030 roku [National Revenue Strategy until 2030]. https://mof.gov.ua/uk/national_income_strategy-716. [in Ukrainian]
10. Pro systemu opodatkuvannia: Zakon Ukrainy. Data nabrannia chynnosti: 25.06.1991 [On Taxation System: Law of Ukraine. Date of Entry into Force: 25.06.1991]. № 1251-XII. https://zakon.rada.gov.ua/laws/show/1251-12/ed19990101#Text. [in Ukrainian]
11. Podatkovyi kodeks Ukrainy: Zakon Ukrainy vid 02.12.2010 № 2755-VI [Tax Code of Ukraine: Law of Ukraine dated 02.12.2010 No. 2755-VI]. Vidomosti Verkhovnoi Rady Ukrainy. 2011. № 13-14, № 15-16, № 17. Ст.112. https://zakon.rada.gov.ua/laws/show/2755-17#Text. [in Ukrainian]
12. Poiasniuvalna zapyska do proektu Zakonu Ukrainy vid 29.08.2019 roku № 1073 «Pro vnesennia zmin do Podatkovoho kodeksu Ukrainy shchodo detinizatsii rozrakhunkiv v sferi torhivli i posluh»: Suprovidnyi dokument vid 29.08.2019. [Explanatory note to the draft Law of Ukraine dated August 29, 2019 No. 1073 «On Amendments to the Tax Code of Ukraine Regarding De-Shading of Settlements in the Sphere of Trade and Services»: Accompanying document dated August 29, 2019]. http://w1.c1.rada.gov.ua/pls/zweb2/webproc4_2?pf3516=1073&skl=10. (дата звернення: 22.05.2023). [in Ukrainian]
13. Pro vnesennia zmin do Podatkovoho kodeksu Ukrainy ta deiakykh inshykh zakonodavchykh aktiv Ukrainy shchodo sproshchenoi systemy opodatkuvannia, obliku ta zvitnosti: Zakon Ukrainy vid 04.11.2011 [On Amendments to the Tax Code of Ukraine and Certain Other Legislative Acts of Ukraine Regarding the Simplified System of Taxation, Accounting and Reporting: Law of Ukraine of 04.11.2011]. № 4014-VI. https://zakon.rada.gov.ua/laws/show/4014-17#Text. [in Ukrainian]
14. Pro vnesennia zmin do Podatkovoho kodeksu Ukrainy shchodo detinizatsii rozrakhunkiv u sferi torhivli i posluh: Zakon Ukrainy vid 20.09.2019 [On amendments to the Tax Code of Ukraine regarding the de-shadowing of settlements in the sphere of trade and services: Law of Ukraine dated 20.09.2019]. № 129-IX. Ofitsiinyi visnyk Ukrainy. 2019. № 84. Ст. 2831. [in Ukrainian]
15. Pro derzhavnu pidtrymku maloho pidpryiemnytstva: Ukaz Prezydenta Ukrainy vid 12.05.1998 [On state support for small businesses: Decree of the President of Ukraine dated 12.05.1998]. № 456/98. https://zakon.rada.gov.ua/laws/show/456/98#Text. [in Ukrainian]
16. Pro rozvytok ta derzhavnu pidtrymku maloho i serednoho pidpryiemnytstva v Ukraini: Zakon Ukrainy vid 22.03.2012 [On the development and state support of small and medium-sized businesses in Ukraine: Law of Ukraine dated 22.03.2012]. № 4618-VI. https://zakon.rada.gov.ua/laws/show/4618-17#Text. [in Ukrainian]
17. Pro sproshchenu systemu opodatkuvannia, obliku ta zvitnosti subiektiv maloho pidpryiemnytstva: Ukaz Prezydenta Ukrainy vid 03.07.1998 [On a simplified system of taxation, accounting and reporting for small businesses: Decree of the President of Ukraine dated 03.07.1998]. № 727/98. https://zakon.rada.gov.ua/laws/show/727/98/ed19980703#Text. [in Ukrainian]
18. Ponomareva, T., & Hrynevich, K. (2020). Problems and ways to improve the simplified taxation system in Ukraine. Bulletin of V. N. Karazin Kharkiv National University Economic Series. (99), 50–56. doi: 10.26565/2311-2379-2020-99-05.
19. Riadinska V, Protsenko T, Kuznietsova O. (2021). Ways of the improvement of the simplified taxation, accounting and reporting system in Ukraine. Science and law enforcement. 142–154.
20. Synchak V.P. (2020). Special taxation mechanism in conditions of functioning of the simplified taxation system. Accounting and Finance. № 2 (88). 103–113.
21. Ukhvala Konstytutsiinoho Sudu Ukrainy pro vidmovu u vidkrytti konstytutsiinoho provadzhennia u spravi za konstytutsiinym podanniam 50 narodnykh deputativ Ukrainy shchodo vidpovidnosti Konstytutsii Ukrainy (konstytutsiinosti) Ukazu Prezydenta Ukrainy «Pro sproshchenu systemu opodatkuvannia, obliku ta zvitnosti subiektiv maloho pidpryiemnytstva»: Ukhvala Konstytutsiinoho sudu Ukrainy vid 16.01.2004 № 6-u/2004 [Resolution of the Constitutional Court of Ukraine on the refusal to initiate constitutional proceedings in the case based on the constitutional submission of 50 people’s deputies of Ukraine regarding the compliance with the Constitution of Ukraine (constitutionality)
of the Decree of the President of Ukraine «On a simplified system of taxation, accounting and reporting of small business entities»: Resolution of the Constitutional Court of Ukraine dated 16.01.2004 No. 6-у/2004]. https://zakon.rada.gov.ua/laws/show/v006u710-04#Text. [in Ukrainian]
22. Zakrevska, O (2022). Display of the simplified taxation system in the bas software product. International scientific journal «Internauka». Series: «Economic sciences». № 7 (63). 147–151.
23. 96/280/EC: Commission Recommendation of 3 April 1996 concerning the definition of small and medium-sized enterprises. https://eur-lex.europa.eu/legal-content/en/TXT/?uri=CELEX:31996H0280.