Successful tax policy could be a good incentive for small business development
These are the findings from the Small Business Attitudes Index, conducted for the second straight year by the European Business Association within the Unlimit Ukraine project. This year, small business representatives slightly worsened their assessment of their own development prospects and economic situation in Ukraine. According to the survey, the overall Small Business Attitudes Index dropped to 2.7 out of 5, compared to 3.2 last year.
Compared to last year, small businesses in Ukraine have found it more difficult to operate. Thus, 38.4% of respondents were dissatisfied with the current business environment, while 31.6% of entrepreneurs are quite satisfied with the situation. For comparison, last year’s positive sentiment prevailed – 45% satisfied against 26% dissatisfied. Also, according to the results of the survey, negative attitudes to the dynamics of business development over the past 6 months prevail – 44.4% against 30.1%.
Despite such sentiments, the surveyed entrepreneurs are willing to actively develop their business in 2019. More than half of respondents (53%) plan to increase funding, and 66% expect revenue growth in the first half of 2019. At the same time, almost half of businessmen (47%) expect the situation in business to improve within the next 6 months. Of these, 65% plan to hire new employees, 77% plan to raise wages, and the same number of entrepreneurs are going to increase investment in their business.
The main problems for the business have slightly changed. Last year most entrepreneurs named inflation as one of their main concerns and this year it ranks only 4th among topical problems for the business (43%). Entrepreneurs are much more concerned about the high tax burden – it was named by 56% of respondents, the high level of corruption (52%), as well as the war in the east (47%).
If entrepreneurs had the opportunity to change one thing in favor of their business, most of them would change the level of taxation. A quarter of respondents believe that this is a major problem for business. The availability of credit follows next by a large margin with 10% of respondents who want changes in this area. The state support for business and purchasing power of the population account for 9% each.
The Unlimit Ukraine project, which unites young Ukrainian businesses, has been successfully operating for three years within the framework of the European Business Association. We are witnessing the formation of a powerful layer of Ukrainian manufacturers that offer quality goods and services and can compete in international markets. It is obvious that building a business "from scratch" is a complex process especially in times of transformation for the country. Uncertainty makes entrepreneurs be cautious with their expectations. In addition, changing legislation, pre-election turbulence, and corruption pressures are still the main issues that hold back the optimism of both big and small businesses. Although it is nice to know that small business is planning further development and expects to improve the situation in the near future.
SMALL BUSINESS ATTITUDES INDEX – conducted by the European Business Association since 2018 within the Unlimit Ukraine project. The first research was unveiled in spring 2018, the results of which can be found via this link.
Project partners this year: LIGA:ZAKON, BRDO, 28Quadrate.
The purpose of the study is to collaborate with small and microbusinesses and to analyze growth points that will stimulate its development. The survey was conducted from December 5 to December 31, 2018. 133 small business owners and directors of all fields of activity joined the survey.
Unlimit Ukraine is a small business and microbusiness development platform created on the basis of the European Business Association. The project provides comprehensive support for small and microbusiness through educational events and consultations, participation in special projects, diagnostics of business problems, and discussion of issues relevant to it. The participants of the project can be small and micro-businesses with the ownership of FOP without limitation of activities.