VAT in the simplified taxation system: analysis of micro and macroeconomic risks for the Russian Federation

Mitin Dmitry Alekseevich ORCID: 0000-0002-7639-8794 PhD in Economics Lecturer; Department of Taxes and Tax Administration; Financial University under the Government of the Russian Federation Advisor; Eurasian Economic Commission 15 Verkhnyaya Maslovka str., Moscow, 127083, Russia mitin.fns@gmail.com Other publications by this author

Introduction

It is generally recognized that small business plays an important role in the growth of the country's economy. According to the Institute for Economic Growth, the share of SMEs in the GDP of developed countries is 50-60%. In turn, according to estimates by the Ministry of Economic Development, by the end of 2023, the share of small businesses in the economy of the Russian Federation was 21.7%, which is the best indicator for the time of observations.

More detailed information on the share of SMEs in the GDP of developed countries as of 2021 (the most up-to-date statistics are publicly available) is shown in Figure 1.

Figure 1. The share of SMEs in the GDP of developed countries in 2021.

Source: compiled by the author.

Thus, the Russian economy has significant potential for growth through the development of small business in the country.

Financial and tax measures are among the most effective incentive measures for the development of small business ^[3].

The purpose of financial incentives is to make capital more accessible and cheaper, and to offset some of the costs.

The purpose of tax incentives is to reduce the fiscal burden, especially at the start and when investing in development, and simplify administration.

In 2025, a large-scale tax reform was implemented in the Russian Federation, in particular, the special tax regime of the USN was adjusted ^[4]. This reform, among other things, is aimed at developing small businesses by creating favorable conditions for interaction with large businesses in the general taxation system and reducing the risks associated with tax administration.

According to the explanatory note of the State Duma Committee on Budget and Taxes, the purpose of this adjustment is "to create conditions for a smooth and phased transition to a common taxation system for taxpayers using the tax system, as well as to combat business fragmentation schemes when the opportunity not to pay indirect taxes becomes a competitive advantage for businesses, which violates the principle of equal taxation.".

In international practice, special tax regimes for SMEs are more often based on ^[5]:

1) simplified taxation systems (for example, the cash accounting method in the USA) ^[6];

2) fixed taxes or imputed income (for example, in Hungary or Albania) ^[7];

3) exemption from VAT for small enterprises (for example, in France, business entities with a turnover of less than 94,300 euros (for goods) / 36,500 euros (for services) are exempt from VAT).

In turn, the approach implemented in the Russian Federation is quite unique. This fact complicates the assessment of the effectiveness of the implemented changes.

Based on the above, the purpose of this study is to identify the risks associated with tax reform for business entities (microeconomic level) and the economy of the Russian Federation (macroeconomic level).

To achieve this goal, the following tasks will be solved::

- conducting economic modeling of the impact of the tax reform on the financial performance of an economic entity on a tax system that has become a VAT payer at reduced rates;

- assessment of the positive and negative consequences of imposing duties on taxpayers applying the tax system for calculating and paying VAT;

- preparation of proposals to mitigate possible micro- and macroeconomic risks.

Problem statement.

Starting from January 1, 2025, taxpayers applying the STS will be recognized as VAT payers.

At the same time, if the income of such a taxpayer for the previous year did not exceed 60 million rubles, then he has no obligation to calculate and pay VAT.

In turn, if the taxpayer's income exceeds the specified limit, then he has the obligation to calculate and pay VAT, but it is possible to calculate the tax at a reduced rate – 5 or 7 percent. If the taxpayer's income for the previous year exceeds 250 million rubles, but amounts to less than 450 million rubles, then such a taxpayer has the opportunity to calculate and pay VAT at a reduced rate of 7%. At the same time, taxpayers who have decided to calculate and pay VAT at reduced rates do not have the opportunity to apply a VAT deduction.

1. The position on the positive impact of the introduction of VAT. A significant group of authors, including L.N. Gorchakova and E.I. Levina ^[9], M.V. Kravchenko ^[10], N.I. Malis ^[11], O.V. Mandroshchenko ^[12], M.O. Nefedkina and P.V. Smelkova ^[13], V.I. Timofeev ^[14], consistently pointed out to the systemic problem inherent in the tax system: the exemption of all taxpayers from VAT, regardless of the chosen object of taxation. The key argument of this group of researchers is the formation of a "tax gap" in the interaction of business on the Unified tax system and the general taxation system (hereinafter referred to as the Main tax system). Since buyers cannot deduct the "input" VAT on transactions with suppliers in the USN, which creates significant barriers to cooperation between large and small businesses, distorts competitive conditions and violates the principle of tax neutrality. The scientists of this group argued that the introduction of VAT under the Unified Tax System would eliminate this gap. They expected that the inclusion of VAT in the price of taxpayers' goods on the USN would allow buyers to apply the tax deduction on a basis, which would generally improve the conditions for interaction and would not have a negative impact on small businesses, or would have a positive impact by expanding the range of counterparties ^[15]. This position focuses primarily on removing barriers in the B2B segment and ensuring tax equality.

2. Position on the risks of declining competitiveness and regional imbalances. In contrast to the first group, researchers such as N.Z. Zotykov ^[17] and A.M. Sadykov ^[18], as well as practitioners ^[19], highlighted the risks of reducing the competitiveness of small businesses, especially in the B2C segment. Their main argument is that the introduction of VAT under the Unified tax System will inevitably lead to an increase in final prices for goods, works and services, which will make them less attractive to end consumers (individuals) compared to those who will remain on the unified tax system without VAT (with an income of less than 60 million rubles) or with large players capable of leveling the growth prices due to scale. This will threaten to drive small businesses out of the market or reduce their margins. An additional critical aspect, noted by other experts ^[20], is related to regional imbalances. They predict that the universality of the reform, without taking into account the specifics of the regions, may provoke the migration of businesses to regions with more preferential tax regimes or other support measures, increasing territorial inequality. This position focuses on the price implications for final demand and the risks to the sustainability of SMEs in the B2C segment.

Thus, the scientific discourse on the introduction of VAT for taxpayers on the Unified tax system is characterized by a polarity of assessments: from expectations of improved cooperation conditions and elimination of distortions to fears of rising prices, reduced competitiveness of SMEs and regional distortions. However, existing studies do not comprehensively assess the microeconomic consequences for the financial stability of taxpayers themselves in the tax system, as well as potential macroeconomic risks (inflation, unemployment, and a reduction in the share of SMEs in GDP). The present study aims to fill this gap through detailed economic modeling at the micro level and a systematic analysis of the resulting macro risks.

Analysis of economic consequences for business entities (microeconomic level).

Entrepreneurs who are not VAT payers have an important advantage – the opportunity to sell their goods, works or services lower than the cost of competitors in the general taxation system, at least by the amount of tax. In this regard, the products of such taxpayers are competitive with suppliers in the general taxation system, especially in the B2C segment, which allows them to make more profit from a single sale and creates the opportunity to invest the difference in the development of their business. At the same time, if necessary, taxpayers on the USN have the opportunity to sell their products with VAT at a total rate of 20% or 10% by issuing a VAT invoice to their buyer, submitting an appropriate declaration and paying the tax. In turn, the buyer will be able to deduct VAT based on the general taxation system.

If a taxpayer becomes a VAT payer on the USN, then he will have a choice to keep the current prices, thereby reducing profits, or to raise prices, which may lead to a decrease in demand, especially if the buyers are individuals and the entrepreneur is not selling a unique product. As a result of higher prices, purchasing power may decrease, which will lead to negative consequences for the state's economy. Due to the absence in open sources of forecasts of authorized bodies from the introduction of VAT for taxpayers using the tax system, we will simulate the situation.

Let's assume that an entrepreneur has sold 1 million units of products worth 100 rubles by the end of the year. Consequently, the taxpayer's revenue amounted to 100,000,000 rubles. As a result of the analysis of the Report on the form No. 5-USN as of 01.01.2024, compiled by the Federal Tax Service of Russia, it was found that the share of expenses in the revenue of taxpayers using USN, on average, is 86.98%. Using this result, let's assume that the expenses of the analyzed company will amount to 86,986,938.25 rubles.

With a tax rate of 6% and the taxable object "income", such a taxpayer would have paid 6,000,000.00 rubles of tax. If he had chosen the "income minus expenses" tax object, the tax rate would have been 15%, and he would have paid 1,951,959.26 rubles of tax. As a result, the net profit of such a taxpayer would amount to 7,013,061.75 rubles with a USN of 6% and 11,061,102.49 rubles with a USN of 15%.

If the total income of such a taxpayer exceeds 60 million rubles by the end of the year, but does not exceed 450 million rubles, then he will be recognized as a VAT payer and will be able to apply a reduced rate of 5% or 7%.

In this situation, the taxpayer will decide to use reduced VAT rates without the possibility of accepting "incoming" VAT for deduction.

In this situation, the taxpayer will have a choice.:

a) increase the price of the realized benefit;

b) do not change the price, thereby reducing the profit.

Let's consider these two scenarios.

Scenario 1. The entrepreneur decides to increase the price of the realized benefit.

Table 1 shows calculations of the financial results of such a taxpayer in the event of an increase in prices for the goods sold, equivalent to VAT rates (by 5 or 7 rubles). The calculations used the average theoretical value of the elasticity of demand for most goods – 0.8. Also, due to the fact that the costs of such a taxpayer for the production of goods will not depend on the chosen reduced VAT rate, the calculations used the arithmetic average of costs to revenue at the price of 105 or 107 rubles in the ratio of 1 to 0.87.

Table 1. Economic modeling of the financial results of a taxpayer on the USN who became a VAT payer at the rates of 5% and 7% and increased the price of the realized benefit many times.

Source: compiled by the author.

It is important to note that the economic modeling of financial results carried out in Table 1 is significantly simplified and does not take into account some aspects (inflation, the real elasticity of demand for the realized good, the uniqueness of the product, competition, etc.). At the same time, the result quite accurately indicates the economic risks of such an entrepreneur, as well as the positive aspects of tax reform.

Thus, the introduction of reduced VAT without the possibility of deducting it will lead to a potential increase in taxpayers' revenue in the context of reduced demand for products. Tax revenues from the USN at a rate of 6% will also potentially increase by about 1%. If a taxpayer chooses a taxable tax base with income minus expenses, the potential budget revenues from this tax will decrease by an average of 57% due to increased expenses (depending on the VAT rate). At the same time, total budget revenues (VAT + VAT) will show significant growth (by 308-391%).

At the same time, the following risks arise::

a) Business profits do not grow, but fall sharply – by an average of 60% and a maximum of 88% with a taxable income tax (6% rate) and a VAT rate of 7%.

b) The tax burden increases several times from 80% when choosing a tax base with the taxable item "income" and a VAT rate of 5%, to 292% when choosing a tax base with the taxable item "income minus expenses" and a VAT rate of 7%.

c) Profitability has decreased significantly. The results of the assessment of the modeled profitability of such an economic entity are reflected in Table No. 2.

Table No. 2. Forecast of changes in the profitability of economic activity of an economic entity in a simulated situation.

Source: compiled by the author.

Scenario 2. The entrepreneur decides not to increase the price of the products sold and to pay VAT at the expense of the proceeds.

In this case, the demand for the product will remain or even increase due to higher prices for similar goods by competitors. When estimating costs, values similar to those used in Scenario 1 will be used in the event of a 5% or 7% price increase, since under the conditions of the reform, most entrepreneurs will raise prices, which will lead to higher costs. The results of economic modeling are shown in Table No. 3.

Table No. 3. Economic modeling of the financial results of a taxpayer on the USN who became a VAT payer at the rates of 5% and 7% and did not increase the prices of the goods sold.

Source: compiled by the author.

In this scenario, the positive aspects of the reform for the budget remain, but the entrepreneur's revenue does not increase due to the use of a similar price and, presumably, maintaining demand (without taking into account the uniqueness of the product and in case competitors do not significantly change prices).

At the same time, the previously identified risks are even more significant.:

Critical drop in profits:

a) USN 6%: profit decreases by 79% at a VAT rate of 5% and goes to a loss (-316,226 rubles, -105%) at a VAT rate of 7%; profitability drops from 7.01% to 1.46% and -0.32%;

b) USN 15%: profit decreases by 43% at a VAT rate of 5% and by 56% at a VAT rate of 7%; profitability drops from 11.06% to 6.34% and 4.83%, respectively.

A sharp increase in the tax burden:

a) USN 6%: total taxes are increased by 79% at a VAT rate of 5% and 109% at a VAT rate of 7%;

b) USN 15%: total taxes increase by 201% at a VAT rate of 5% and 279% at a VAT rate of 7%;

c) Reduced competitiveness at cost: although the final price for the buyer does not increase, the share of expenses (cost + taxes) in revenue increases significantly, reducing marginality to 5.7–7.5% (versus 13% without VAT) and limiting opportunities for investment and development.

In order to visually reflect the impact of the tax reform on SMEs, Figure 2 shows a comparison of the profitability of an economic entity that sells goods, works or services with VAT at reduced rates without the right to tax deduction and without paying this tax.

Figure 2. Comparison of profitability of economic entities on the USN without VAT and on the USN with VAT at the rates of 5% and 7%.

(For reference: Scenario 1 – the price of the good being sold is increased by VAT, Scenario 2 – VAT is included in the price (the price of the good has not changed)).

Source: compiled by the author.

Additionally, we will highlight the following risks at the micro level.

Increased administrative burden. The introduction of VAT significantly complicates accounting and reporting for simplifiers, which is a hidden cost.

Reduced investment and development. Business entities will be forced to focus on avoiding bankruptcy by postponing investments in development, new technologies, and marketing, which may lead to a decrease in the quality of the goods they sell.

Competitive distortions. On the one hand, business entities that remain on the USN without VAT (income less than 60 million rubles) will gain competitive advantages. On the other hand, large players already working with VAT may increase pressure on this segment and, as a result, displace or absorb weakened players.

These risks are compounded by the unstable economic situation, high key interest rates, as well as sanctions pressure on the Russian economy.

For the objectivity of the conclusions, it is important to note that the results obtained will not necessarily arise for all entrepreneurs who have become VAT payers at reduced rates due to the fact that a simplified model is used in the calculations that does not take into account many factors, but the identified risks are possible for a significant number of entrepreneurs. The identified risks will be particularly evident in the B2C segment, as well as among business entities that sell goods with high elasticity of demand, as well as those with low profitability.

Analysis of the consequences for the economy of the Russian Federation (macroeconomic level)

First, it is important to note that it is not possible to conduct economic modeling of the consequences of tax reform for the economy of the Russian Federation due to the lack of publicly available information, for example: the distribution of taxpayers by income groups (less than 60 million rubles, from 60 to 250 million rubles and from 250 to 450 million rubles); the share of such taxpayers in respect of which the tax benefits provided for in Articles 145, 149 of the Tax Code of the Russian Federation apply; the actual ratio of income and expenses of business entities; the amount of taxes paid by them, and others.

At the same time, using the results obtained from economic modeling at the micro level, we can assume the following economic consequences for the macro level.

Positive effects.

In the short term, tax revenues to the budget from small and medium-sized businesses will increase significantly.

The use of an illegal optimization scheme in the form of "fragmentation" of business will become less attractive, which will lead to a reduction in the shadow sector of the economy (especially in relation to taxpayers with incomes of 200-400 million rubles).

Stimulating the development of small businesses that realize benefits in the B2B segment in connection with the formation of more favorable conditions for interaction with large businesses in the general taxation system.

Negative effects.

Due to the increase in prices for their goods, works and services by business entities on the USN that have become VAT payers, the demand for the goods they sell will decrease. As a result, business entities will be forced to reduce production and/or staff. Both highlighted optimization approaches will lead to an increase in unemployment in the state.

It is important to clarify that the drop in demand does not affect the entire economy, but only a certain category of businesses, primarily those working with individuals. At the same time, a "domino effect" is possible, since this segment is large and significant for the consumer market (especially consumer goods/services), its problems may spread to related parties (suppliers, logistics) and reduce the incomes of its employees, which may eventually put moderate pressure on overall consumer demand.

An increase in the inflation rate, especially for goods, works and services with low elasticity of demand.

A number of taxpayers will not be able to adapt to the new conditions, which will lead to massive bankruptcy in the SME segment, especially in relation to entrepreneurs who sell benefits to end users (individuals). As a result, budget tax revenues will decrease (taxes levied in connection with the application of the tax code, personal income tax, VAT, property tax, transport tax, etc.). In addition, these events will also affect the growth of unemployment.

As noted earlier, SMEs are the driver of the country's economic development. At the same time, the risks identified at the micro level may lead to a reduction in the share of SMEs in the GDP of the Russian Federation due to a series of bankruptcies and the absorption of previously occupied market niches by large players. There may be risks of monopolization of certain market segments.

Reducing the investment attractiveness of the SME segment, which may lead to a reduction in growth rates, as well as a decrease in innovation in this sector.

Formation of a new shadow sector. Increasing the tax burden may push some businesses to conceal their real turnover or go into the shadows. This risk will be especially pronounced in relation to taxpayers whose income is approaching 60 million rubles, and is also approaching 450 million rubles. As a result, a situation may arise in which some taxpayers on the USN applying an illegal optimization scheme in the form of "crushing" a business whose income ranged from 200-400 million rubles will decide to stop using the "crushing" scheme, but taxpayers whose revenue is approaching the lower or upper limit of the range for VAT payers at a reduced rate in order to preserve On the contrary, they will resort to illegal optimization for competitive advantages.

For the sake of objectivity of the conclusions drawn, we note that the identified risks will be stronger in industries with the highest elasticity (for example, optional services, goods with many analogues) and weaker in industries with low elasticity (some food products, medicines).

To identify the industries in which this problem will be most pronounced, Table 4 summarizes the theoretical values of the elasticity of demand for various goods, works and services.

Table 4. Theoretical values of elasticity of demand

Source: compiled by the author.

Thus, the analysis demonstrates that the fiscal motive prevails in the analyzed reform, which is not able to fully offset significant risks.

Suggestions for minimizing the identified risks.

The analysis revealed significant micro- and macroeconomic risks associated with the introduction of VAT duties for taxpayers with incomes over 60 million rubles and without the right to tax deduction. Given the high uncertainty of the consequences of the reform and the lack of necessary open statistics for full-fledged macroeconomic modeling, it is advisable to consider the following proposals ^[21].

Proposals for leveling microeconomic risks.

Business entities do not have the opportunity to have a significant impact on the tax policy implemented in the state. In this regard, it is necessary to focus efforts on minimizing the negative consequences of the reform, adapting production processes to new conditions. The following is suggested for this purpose.

1) Carefully recalculate the financial model when choosing a taxable object under the USN ("income" at a rate of 6% or "income minus expenses" at a rate of 15%), taking into account VAT obligations. As is clearly demonstrated in Tables 1-3, with high material costs, the taxable object is "income minus expenses" (15%) it may become more profitable, despite the formally higher rate. In particular, when making a decision, you should contact the specialized service of the Federal Tax Service of Russia – "Choosing the appropriate tax regime" (URL: https://www.nalog.gov.ru/rn77/service/mp /).

2) Strategic pricing based on demand elasticity. As can be seen from the data shown in Table 4, the elasticity of demand for various goods, works and services varies significantly. In this regard, entrepreneurs should avoid a universal increase in prices for the entire range by the amount of VAT (Scenario 1) or a complete absorption of VAT (Scenario 2). It is more expedient to differentiate prices depending on the elasticity of demand for it.

For example, for goods, works, and services with low elasticity of demand, a more significant price increase is acceptable, since demand is less sensitive. In turn, for goods with high elasticity of demand (entertainment, luxury, goods with analogues), it is advisable to apply a hybrid approach: minimal price increases, search for ways to reduce costs (negotiations with suppliers, logistics optimization), emphasis on the uniqueness of the offer. Also consider the possibility of partial absorption of VAT at the expense of profits in relation to sales-critical items.

3) Automation and optimization of tax accounting. In order to minimize errors in tax accounting, it is advisable for taxpayers who have become VAT payers to pay attention to accounting software packages adapted to the tax accounting system with VAT. Such software allows you to automate a number of routine operations, and also minimizes the risk of technical errors. Alternatively, VAT accounting functions can be outsourced to a specialized accounting company if internal resources are insufficient or ineffective. In addition, such entrepreneurs need to develop clear internal regulations for working with primary documents, as well as consider taking advanced training courses to minimize the risks of errors and claims from tax authorities.

Proposals for leveling macroeconomic risks.

1) Launch of operational monitoring of key indicators of the affected segment of SMEs. Dynamics of revenue, profit, profitability, prices, number of employees, bankruptcy cases. The data should be aggregated by industry and income size groups.

Establish "control points" (triggers) upon reaching negative indicators (for example, an increase in bankruptcies in the sector by X%, a decrease in the share of SMEs in GDP by Y%), at which a review of reform parameters is automatically launched or additional compensatory support measures are introduced.

2) Differentiation of VAT and USN rates by industry. A universal approach to applying reduced VAT rates (5% or 7%) without deduction does not take into account significant differences in profitability and elasticity of demand by industry (Table 4). In this regard, it is proposed to establish reduced VAT rates (with or without the right to deduct), not only depending on the amount of income, but also taking into account the type of economic activity (OKVED codes). Priority in setting lower rates (or maintaining the exemption) should be given to industries with high elasticity of demand (entertainment, individual services, optional goods) and with traditionally low margins (retail, catering), where the risk of reduced demand and profits is highest.

At the same time, consider the possibility of temporarily reducing the tax rate (for the "income" and/or "income minus expenses" facility) for the most vulnerable industries subject to VAT obligations to compensate for the increased fiscal burden.

3) The introduction of a partial tax deduction mechanism for "incoming" VAT. The complete absence of the right to VAT deduction for USN payers who apply reduced rates is a key factor in the growth of their expenses and a decrease in profitability (Tables 1, 3). It is proposed:

Introduce a limited deduction for VAT paid on the purchase of fixed assets and/or raw materials/materials critical to the production process from business entities that pay VAT. This will reduce the cost burden on businesses investing in development and partially offset price pressures.

Alternatively, consider a mechanism for refunding part of the paid "incoming" VAT in the form of a targeted subsidy for investments or tax payment subject to certain conditions (for example, revenue growth, job creation).

4) Phased transition and "tax holidays". A drastic change in the tax regime for businesses that have crossed the threshold of 60 million rubles creates significant adaptation difficulties and bankruptcy risks. Suggested:

a) Introduce a transitional period (1-2 years) for taxpayers who exceed the income limit for the first time. During this period, a reduced VAT rate is applied with the right to a limited deduction, or VAT exemption is maintained, provided that revenue growth does not exceed a certain percentage (for example, 10-15% per year).

b) Establish "tax holidays" for VAT payments for the first 1-2 years after the transition to its payment in order to stimulate the adaptation of the business model without an immediate shock increase in prices or a drop in profits.

5) The expansion of thresholds and the introduction of progression. The existing thresholds (60 million, 250 million, 450 million rubles) may not be flexible enough. In this connection, it is proposed:

a) Increase the threshold for mandatory VAT payment from 60 million rubles to a level that more adequately reflects the boundaries of micro and small enterprises (for example, 100-120 million rubles), thereby reducing the number of subjects at risk.

b) Alternatively, consider introducing a smooth progression of the VAT rate. For example, from 0% for income less than 60 million rubles; 3% for income from 60 to 100 million rubles; 5% for income from 100 to 150 million rubles, 7% for income from 150 to 300 million rubles; 9% for income from 300 to 450 million rubles) This approach will allow businesses to gradually adjust prices and costs.

6) Strengthening measures of direct financial support and stimulating demand. To develop targeted preferential lending programs (subsidizing rates) for SMEs that have become VAT payers under the new rules, aimed at compensating for increased working costs and financing investments to improve efficiency.

To introduce or expand state/municipal procurement tools with a mandatory quota for SMEs that have become VAT payers, providing them with guaranteed sales.

Conclusion

The conducted analysis of the reform of the USN tax regime revealed a complex and ambiguous picture of its potential consequences.

On the one hand, the reform stimulates the interaction of SMEs with large businesses in the general taxation system, which should contribute to its development, as noted by some experts in their research. In addition, it has been established that imposing the obligation on taxpayers to calculate and pay VAT at reduced rates may contribute to reducing the shadow sector of the economy, since it will become unprofitable for certain categories of business entities to apply illegal optimization schemes. A significant increase in tax revenues to the budget is also projected in the short term.

On the other hand, the analysis demonstrated that the introduction of VAT for taxpayers on the tax base poses a threat to reduce their competitiveness (confirming the concerns of other experts and representatives of the business community noted in this study), investment activity, and increases the risks of bankruptcy, especially in the B2C segment and industries with high elasticity of demand. The increased administrative burden is also a significant negative factor. Moreover, a potential increase in inflation for goods with low elasticity, a decrease in consumption and an increase in unemployment are predicted.

Based on the above, the scientific novelty of the study lies in the development and application of an integrated approach to assessing the consequences of the tax reform, combining microeconomic scenario modeling of financial indicators of business entities (taking into account the elasticity of demand and the lack of VAT deduction rights) and a systematic analysis of the resulting macroeconomic risks (inflation, unemployment, monopolization). This approach made it possible to develop the scientific works of specialists who note the risks of tax reform, including quantifying the high probability of a significant decrease in the profitability and competitiveness of SMEs in the B2C segment, as well as pointing out the possible predominance of the fiscal motive in the implementation of the reform over the declared incentive function.

The practical significance of the study is expressed in the developed tools that can be used by authorized bodies for possible adjustments to tax policy in order to mitigate negative consequences and achieve the goals of SME development without undermining its sustainability.

The article is published in its final version as approved following the last positive peer review recommending acceptance for publication. It incorporates revisions made by the author in response to prior negative peer review reports that did not recommend publication. All peer review reports, including initial negative reviews, are published in open access alongside the article. All versions of the author’s revisions are archived in the publisher’s repository and may be made available upon reasonable request in accordance with Elsevier’s editorial policies and applicable data availability requirements.
Read all reviews on this article