TRANSFORMATION OF THE TAX SYSTEM OF UKRAINE IN THE CONDITIONS OF DIGITALIZATION

Abstract

This article presents a comprehensive study of the theoretical foundations, institutional constraints, and practical challenges associated with the transformation of Ukraine’s tax system in the context of digitalization. The author emphasizes that the digitalization of taxation is not merely a technological process but a deep structural transformation of the fiscal environment that redefines the logic of interaction between the state and the taxpayer. It is argued that, under current conditions, digital solutions serve not only as service instruments but also perform a strategic function of modernizing the institutions of tax control, administration, and reporting. The article provides a critical analysis of the functioning of the current tax model in Ukraine, including an assessment of fiscal efficiency, revenue structure, the extent of economic shadowing, and the barriers to digital tax administration. It has been established that the dominance of indirect taxes, the low level of voluntary tax compliance, and the fragmented implementation of digital tools limit the potential of the existing model within the digital context. The author outlines the leading directions of tax system digitalization in Ukraine: the implementation of e-audit, electronic invoicing, e-VAT systems, the Risk Monitoring System (SMKOR), and the Taxpayer’s E-Cabinet. An original classification of digital instruments is provided, with an assessment of their level of implementation, advantages, and systemic weaknesses. Key risks associated with digital transformation are also analyzed, including cybersecurity threats, digital inclusion deficits, regulatory fragmentation, technological inequality, and behavioral limitations of taxpayers. Based on the findings, the article proposes a vision of an integrative digital tax system. Directions for adapting tax legislation to new digital formats of accounting and control are identified, along with the substantiation of the need to shift from a controlling to a service-partnership model of interaction between fiscal authorities and taxpayers. A number of institutional measures are proposed to enhance transparency, predictability of tax policy, and voluntary compliance with tax obligations. A distinctive feature of the article lies in its systemic synthesis of macroeconomic, analytical, and legal analyses of the digital transformation of Ukraine’s tax system, as well as in the development of the concept of digital fiscal partnership as a basis for a modernized tax paradigm.