De-shadowing of the wholesale and retail trade in the regions of Ukraine as a factor of increasing the efficiency of using their development potential

Abstract

The paper examines the peculiarities of the spread of the shadow economy in the sphere of wholesale and retail trade in the regions of Ukraine. The nature and features of the trade sphere shadowing in different regions of Ukraine are revealed. The trade enterprises in large cities and near-border regions are established to be the most subject to the shadow processes. These regions play a main role in the development of wholesale and retail trade in Ukraine. At the same time, trade is more important in the structure of their economy compared to other regions. The main tendencies of the change of shadow economy volumes in the trade sphere of Ukraine and its regions are outlined. In 2017 compared to 2013, the volumes of shadow operations in the sector of wholesale and retail trade reduced in the prevailing number of Ukraine’s regions. However, it was accompanied by an increase in the number of individual entrepreneurs in trading activities. This was the cause for a conclusion about the transition of the part of the shadow market in wholesale and retail trade in the regions of Ukraine into the sector of individual entrepreneurs. This manner of tax evasion has become especially widespread in Ukraine during recent years. As a result, the volume of shadow operations in the wholesale and retail trade in Ukraine has reached about 50%, ranging from 35-40% to 60% and more in different regions. Proposals aimed at the de-shadowing of the trade sector of Ukraine are formulated. Their implementation will allow to reduce the volume of shadow operations in the wholesale and retail trade of most regions of Ukraine and to increase the efficiency of using the socio-economic potential of their development. These proposals are intended to introduce institutional changes aimed at limiting the ability of retailers to use individual entrepreneurs for tax evasion. In addition, strengthening the influence of local self-government bodies on control of the economic entities’ activity in the sphere of wholesale and retail trade in the regions is suggested.