SUMMARY
The purpose of the paper is to reveal the conditions of the innovative development of the small and mediumsized entrepreneurship in Ukraine; the problems that suppress the innovative activity and small and medium-sized enterprises development; peculiarities of the tax incentives for the development of the entrepreneurship in the advanced countries and in Ukraine; the main kinds and characteristics of the small and medium-sized enterprises public support. Methodology. The methods of scientific research include: analysis and generalization for studying the main kinds and characteristics of the government support of the small and medium-sized enterprises; dynamic and comparative analysis for studying the problems and factors influencing the development of small and medium enterprises and innovative activity, peculiarities of tax incentives for business development; systemanalytical method for studying the conditions of the innovative development of the small and medium-sized entrepreneurship. Results. The government's financial support priorities should be: optimal application of the fiscal regulation instruments (reduction of the amount of taxes, determination of the criteria for the maximum taxation amount, tax incentives etc.), maintenance of the self-investment of small and medium-sized enterprises as well as investment, financial means of the public influence over the development of the enterprises, effective combination of both direct and indirect forms of the innovative development support. Practical implications. The obtained results can be used in the process of formation and implementation of the small and medium enterprise sector development strategy and innovative activity in the long-term perspective. Value/originality. The obtained data can provide a better understanding of the direction of innovative business development in Ukraine.