27% of surveyed sole proprietors plan to close in the near future
More than half of them cite old-new taxes as the main reason for closure
24 December 2024
Opendatabot conducted the largest study on the state and plans of sole proprietors in Ukraine, with nearly 32,000 entrepreneurs participating. 27% of respondents plan to close their businesses soon. More than half of these closures are due to a sharp increase in tax burdens. In December, for every sole proprietorship opened, two entrepreneurs are closing their businesses. By comparison, a year ago, the situation was the opposite: for every four new businesses, there was only one closure.
Opendatabot conducted a large-scale survey of Ukrainian entrepreneurs to understand the plans of small and medium-sized businesses for the near future.
A total of 31,694 respondents who operate as sole proprietors participated in the study. Of these, 27%, or 8,621 entrepreneurs, plan to close their businesses soon.
This includes 2,297 (7%) who planned to close this year and another 20% (6,324) who intend to cease operations next year. Over half (62%) of those planning to close their businesses cite tax increases as the primary reason. Another 19% are shutting down due to business-related challenges.
It is worth noting that, due to a massive cyberattack by pro-Russian hackers on state registries, closing a business is currently either extremely difficult or outright impossible.
| Taxes | 5,341 | 62.0% |
|---|---|---|
| Business Not Profitable | 1,619 | 18.8% |
| Decision by Management | 161 | 1.9% |
| Other Reasons | 1,268 | 14.7% |
| No Response to the Question | 232 | 2.7% |
Most Ukrainian Sole Proprietors Work in Retail and IT. Retail (24.6%) and IT (21%) are the leading industries among surveyed entrepreneurs.
Since the introduction of the military tax for small and medium businesses, closures have doubled compared to openings.
Key Statistics (Since Law Enactment):
- Businesses Closed: 24,497
- Businesses Opened: 10,947 (2.2 times fewer than closures).
Comparison with the previous year: last year, for every 4 new businesses, 1 closed during the same period.
Opendatabot reached out to the Chair of the Finance, Tax, and Customs Policy Committee, Danylo Hetmantsev, for a comment. However, no response was received by the time of publication.
Source: Opendatabot
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