Problems of accounting for small and medium businesses in the conditions of digitization in the Kyrgyz Republic

Understatement of income by entrepreneurs is perceived by society as a common phenomenon. This article discusses the importance of compliance with accounting and tax laws, which largely depends on the qualifications of accountants and the conscientious behavior of business owners, and also examines the facts and conditions of tax evasion and concealment of income in the business sector. We have analyzed the long-term consequences of a voluntary-forced transition to a simplified taxation system based on a single tax by small and medium-sized entrepreneurs of the Kyrgyz Republic. Tax evasion under this reform implies a slight increase in the net worth of entrepreneurs, while a significant increase in personal wealth. We came to this conclusion based on the results of analysis and monitoring of tax evasion, which implies a much higher level of personal capital, a more negative impact on wealth inequality, and taking into account tax evasion by entrepreneurs is important for the quantitative analysis of tax reforms.