Yurchishena Liudmyla, Doctor of Economics, Associate Professor, The Head of the Department of Finance, Banking and Insurance, Vasyl Stus Donetsk National University, Vinnytsia, Ukraine

ORCID: 0000-0002-5904-0758
e-mail: l.yurchishena@donnu.edu.ua

Kryvoruchko Anastasiya, Master’s Student, Vasyl Stus Donetsk National University, Vinnytsia, Ukraine

ORCID: 0009-0003-5082-3160
e-mail: kryvoruchko_a@donnu.edu.ua

The role of digitalization in reducing the shadow economy and optimizing tax administration in Ukraine

Abstract. Introduction. This article examines how digitalization in tax administration can enhance fiscal efficiency and reduce the shadow economy in Ukraine. The study identifies the main reasons for the existence of the shadow sector and examines its negative effects on the development of the national economy. It pays special attention to the implementation of digital tools in the tax sphere, particularly the introduction of the Electronic Taxpayer Cabinet, which is a key instrument for interaction between businesses and fiscal authorities. The research emphasizes the role of digitalization in promoting transparency, accountability, and efficiency within the tax system. 

Purpose. The study’s main objective is to analyze how digitalizing tax administration increases tax revenues, legalizes business processes, and strengthens the state’s financial stability. Additionally, the study aims to develop a concept for improving digital tax administration in Ukraine, aligning it with European standards and ensuring an effective, secure fiscal policy framework.

Results. A statistically significant relationship was established between the growth in the number of users of electronic tax services and the increase in tax revenues based on regression analysis. The study shows that digitalization makes tax collection more transparent and efficient, reduces opportunities for informal economic activities, and improves communication between taxpayers and fiscal authorities. Furthermore, the findings show that adopting digital tools modernizes tax administration, standardizes fiscal procedures, and enhances business compliance.

Conclusions. The study concludes that the digital transformation of tax administration in Ukraine is a crucial step toward building a modern, effective, and transparent tax system. The proposed concept for improving digital tax administration emphasizes optimizing interactions between taxpayers and the state, strengthening fiscal security, and adapting the national tax system to European best practices. Implementing this concept will contribute to sustainable economic development, increased fiscal efficiency, and Ukraine’s integration into the European economic space. The scientific novelty of this study lies in formulating a concept that combines policy, technology, and governance measures to enhance the effectiveness and security of tax administration, while also fostering economic transparency and modernization.

Keywords: concept of improving the digital transformation of tax administration; shadow economy; electronic services; tax revenues; electronic taxpayer’s office; digital technologies.

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