Digitalization of Local Tax Administration in the System of Generating Own Revenues and Ensuring Financial Self-Sufficiency of Territorial Communities

Abstract

The article examines the role of digitalization in local tax administration within the system of forming own-source revenues and ensuring the financial self-sufficiency of territorial communities in Ukraine. The study is motivated by the ongoing decentralization reform and the growing importance of local governments' fiscal capacity for providing public services and supporting local development. The purpose of the research is to substantiate theoretically and assess empirically the impact of digital tax administration on the expansion of the local tax base and the strengthening of community financial autonomy. The methodological framework combines a systemic approach, comparative analysis, structural-logical analysis, institutional analysis, economic-statistical methods, and graphical and tabular generalization. The results demonstrate that own revenues of local budgets increased from UAH 398.1 billion in 2022 to UAH 514.0 billion in 2025, while local taxes such as the single tax, land fees, and real estate tax showed stable growth. The analysis identifies significant reserves for increasing revenues through improved administration, better integration of cadastral and property registries, and the use of geoinformation systems. The paper develops a conceptual architecture of the digital ecosystem of local tax administration, highlighting the interaction between registries, integration services, tax administration, analytics, the treasury system, and territorial communities. The study concludes that digitalization is becoming a key factor in improving the efficiency of local revenue mobilization by increasing transparency, reducing information asymmetry, automating tax administration processes, and enhancing the completeness of taxpayer and property records. However, the current digital infrastructure remains fragmented, and insufficient interoperability between registries and local authorities limits the full realization of communities' tax potential. Further development of integrated digital platforms, geoinformation technologies, and advanced analytics is essential for strengthening the financial self-sufficiency of territorial communities.