Tax compliance as a tool for effective tax administration: characteristics and current issues

Abstract

In today’s environment, compliance with legal requirements regarding the transparency of business operations, the timely fulfilment of tax obligations to the state, and the reduction of tax evasion risks has become particularly important. The scientific research is aimed at substantiating the relevance of tax compliance in the modern business environment, defining its functional mission, and strategic development vectors in a practical aspect. The aim of the article is to summarise the theoretical and methodological foundations of tax compliance and to justify its role in the modern tax administration system. To achieve this objective, the following research methods were employed: logical analysis (to examine the essence of tax compliance, identify its key characteristics and role within the tax administration system); systematisation (to organise scientific approaches to the interpretation of tax compliance, as well as to summarise the main factors influencing the level of compliance with tax legislation); generalisation (to describe the main trends in the development of tax compliance, determine its role in ensuring voluntary fulfilment of tax obligations, and formulate conclusions regarding the need to introduce effective compliance mechanisms into modern tax administration practice); graphical representation (to provide a visual presentation of individual elements of the tax compliance system and a visualisation of its theoretical model of functioning and development in the current economic environment). The study found that the implementation of effective tax compliance mechanisms contributes to improving tax discipline, developing a tax culture and fostering an appropriate level of voluntary compliance with tax obligations. The functions of the instrument under study have been summarised and the contours of its development from a strategic perspective have been outlined.

The research findings confirm that tax compliance is an effective instrument of tax administration aimed at ensuring the alignment of the interests of the state and taxpayers through voluntary compliance with tax legislation, minimising tax risks, enhancing the efficiency of fiscal management, and ensuring the stability of budget revenues.