Effectiveness of blockchain technology implementation in the taxation system of business entities

Abstract

The article explores the effectiveness of implementing blockchain technologies in the taxation system of business entities as a tool for the digital transformation of tax administration. The relevance of the research is driven by the need to increase transparency in fiscal processes, ensure the accuracy of tax data, and reduce the level of tax violations in the context of a developing digital economy. Thepurpose of the study is to assess the effectiveness of blockchain technology integration in the taxation system, considering its impact on the transparency, reliability of tax information, and the overall level of tax compliance. Methods. To achieve the research objectives, general scientific methods of analysis, synthesis, generalization, and a systems approach were applied for a comprehensive study of the technical, legal, and economic aspects of technology integration. Results. It was established that blockchain can ensure decentralized, immutable, and transparent accounting of tax operations, contributing to the strengthening of digital trust between the state and business. The main tools for implementation in the taxation system of business entities were identified, including private blockchain networks, smart contracts, hashing mechanisms, and API integrations. Key problems hindering technology integration were revealed: technical incompatibility with existing systems, lack of regulatory framework, and organizational unpreparedness of the tax infrastructure. It was proven that blockchain-based solutions provide economic benefits both for the state (through reduced administrative costs and increased revenue) and for businesses (by simplifying tax procedures and reducing transactional costs). Recommendations were developed for the phased implementation of the technology, taking into account legal, technical, and human resource factors. Scientific novelty lies in a comprehensive vision of the economic feasibility of blockchain technologies in tax administration, with a focus on specific barriers and ways to overcome them. Conclusions. It was found that blockchain technologies enhance the transparency and efficiency of tax administration through decentralization, data immutability, and process automation. The economic feasibility of their implementation was substantiated for both the state and businesses. The need for a phased rollout of blockchain solutions was justified, considering regulatory, technical, and personnel-related factors. Further research should focus on developing models for assessing the effectiveness of integration and exploring synergies with other digital public governance tools.