The impact of digitalization of tax administration on the level of tax evasion

Abstract

The study’s relevance stems from the need to combat tax evasion amid the rapid digital transformation of economic processes and public administration. The purpose of the article is to examine theoretical approaches and assess the impact of digitalization on tax administration and tax evasion in Ukraine. The research used the following methods: analysis of the scientific literature to review current developments in the field, and generalization and systematization to present the research results. Results. The article presents a comprehensive analysis of the interaction between technological innovations and tax compliance, with an emphasis on the institutional, economic and behavioral aspects of this process. The economic essence and modern forms of tax evasion are considered, in particular those that arise in digital economic environments, which allows understanding the transformation of mechanisms used to hide taxable income. The current state of digitalization of tax administration in Ukraine is analyzed, in particular, the implementation of electronic services, automated control systems and data integration tools, which together form a new model of interaction between taxpayers and tax authorities. It is established that the implementation of digital technologies increases transparency in financial transactions, reduces opportunities for manipulation and strengthens the analytical capabilities of tax authorities, thereby decreasing the frequency of typical tax offenses. It has been established that the effectiveness of digital solutions manifests itself in increased voluntary compliance with tax legislation, optimized administrative procedures and a gradual reduction in the shadow economy, although these effects differ and depend on institutional and technological factors. At the same time, it has been determined that the digital transformation of tax administration is accompanied by a number of risks, in particular, digital inequality among taxpayers, cybersecurity threats and the emergence of more sophisticated forms of tax evasion that use technological innovations. Conclusions. It is established that the long-term success of digitalization in reducing tax evasion requires a balanced combination of technological development, institutional capacity-building, and the adaptation of regulatory mechanisms to the challenges of the digital economy. Therefore, digitalization is an important, but not exhaustive, factor in ensuring tax discipline, and its impact should be assessed within the broader framework of economic and managerial transformations.