Tax instruments for agricultural sector de-shadowing in the context of fiscal decentralization: effects and governance implications for territorial communities

Abstract

Abstract: The purpose of the study is to provide a comprehensive substantiation of the role of tax instruments for de-shadowing the agricultural sector under conditions of fiscal decentralization and digital transformation of public administration, as well as to assess their fiscal effects and managerial implications for the financial capacity of territorial communities. Particular attention is paid to identifying institutional and informational factors influencing the effectiveness of tax policy in the field of land use. The study employs systemic and structural-functional approaches, methods of economic analysis, generalization and comparison, statistical analysis of the dynamics of tax revenues to local budgets, as well as an institutional approach to assess the impact of digitalization and interagency data integration on the effectiveness of tax administration. The information base includes regulatory and legal acts, official statistical data, and results of contemporary scientific research. It is substantiated that tax instruments for de-shadowing, including land payments, the single tax, personal income tax on lease payments, and the minimum tax liability, contribute to expanding the tax base, increasing the level of land use formalization, and strengthening the financial foundation of local self-government. It is established that their effectiveness largely depends on the level of digital integration of registers, the quality of institutional interaction, and the administrative capacity of territorial communities. It is proved that the implementation of a digital service-based administration model, based on the integration of information resources, risk-oriented control, and service interaction with taxpayers, creates preconditions for reducing the scale of informal land use and increasing voluntary tax compliance. It is concluded that improving the effectiveness of tax instruments for de-shadowing the agricultural sector requires a transition to an integrated digital service model of public administration that combines analytical control, interagency coordination, and active participation of territorial communities. The implementation of this approach will contribute to the formation of a stable revenue base for local budgets, increased transparency of land use, and the creation of favorable conditions for the legalization of agricultural business activities.