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The article discusses the effects of fiscal instruments used to stimulate the development of small business in Ukraine and the hypothesis that the inconsistencies inherent in these instruments prevent them from achieving the desired outcomes. To test this hypothesis, the authors estimated the percentage of small businesses covered by the simplified tax scheme and analyzed such fiscal instruments as the simplified tax scheme, various types of debt financing and taxation of debt financing. The authors used the data on the amount and dynamics of repayable financial assistance to estimate the scale of the phenomenon of corporate split-ups. The latter might be caused by the interest of large and medium-sized companies in accessing small business tax preferences. To calculate the amount of repayable financial assistance the authors propose to adjust the indicator of other current liabilities for the following indicators: other current accounts payable; interest incomes of resident banks; interest incomes of non-resident banks from their lending transactions in Ukraine; commission incomes of resident banks; and the total amount of corporate bonds. The analysis relies on the data of the State Statistics Service of Ukraine on activity of companies and the data of the National Bank of Ukraine on the country’s banking system in 2012–2017. The results of the analysis have confirmed the initial hypothesis about the contradictory effects of fiscal instruments:  1) In the given period, from 22% to 38% of small businesses did not have access to the benefits of the simplified tax system due to the inadequacy of the criteria for defining the size of business.  2) The taxation norms discriminated against small businesses seeking to use specific instruments of debt financing: instead of stimulating the development of start-ups, these fiscal instruments encouraged large and medium-sized companies to split into smaller units.  3) What distinguishes Ukraine from other countries is the wide use of repayable financial assistance by small businesses to attract funds. Calculations have shown that the share of repayable financial assistance among other available instruments of debt financing in the given period exceeded 28%.  Thus, the findings indicate that further improvements of small business taxation are necessary.   For citation   Yaroshevych N. B., Cherkasova S. V., Kalaitan T. V. Inconsistencies of small business fiscal stimulation in Ukraine.  Journal of Tax Reform . 2019;5(3):204–219. DOI: 10.15826/jtr.2019.5.3.068   Article info   Received  April 25, 2019 ; Revised  September 15, 2019 ; Accepted  October 2, 2019