The Role of Tax Control in Countering the Shadow Economy of Ukraine: Problems and Ways of Improvement

Abstract

The article examines the role and significance of tax control as a tool for countering the shadow economy in modern conditions of Ukraine’s development. The essence of the shadow economy as a complex economic phenomenon is revealed, and its main characteristics are analyzed. Key causes of the emergence and growth of the shadow economy are identified, including: high tax burden, excessive regulation, poor quality of public services, economic crises and instability, and high unemployment. The complex bilateral relationship between tax control and the shadow economy is investigated, where each element has a significant impact on the effectiveness of the other. The main problems of tax control implementation are systematized, including: difficulty in detecting informal operations, lack of reliable data for analysis, corruption risks, technical and resource limitations of controlling authorities, constant adaptation of the shadow sector to new control methods, legislative gaps, and low level of tax culture in society. For each identified problem, possible solutions are proposed, including the implementation of modern data analysis technologies, strengthening inter-agency cooperation, improving personnel selection systems, modernizing technical infrastructure, and conducting educational campaigns. A complex of practical recommendations has been developed to increase the effectiveness of tax control through improving electronic accounting and reporting, strengthening the analytical component in tax authorities’ work, simplifying legislation, optimizing tax burden, and strengthening responsibility for tax violations. The necessity of a balanced approach to reforming the tax control system is substantiated, taking into account the interests of all stakeholders and creating prerequisites for reducing the level of shadow economy in Ukraine.