STRATEGY FOR DIGITALIZING THE USE OF TAX INCENTIVES IN THE ECONOMY

Abstract

This article examines strategic directions for digitalizing the use of tax incentives in the economy. Tax incentives are commonly used to stimulate investment, innovation, exports, regional development and formalization of entrepreneurial activity. Nevertheless, their effectiveness is often limited by fragmented databases, manual verification, weak post-benefit monitoring and insufficient transparency. The article argues that digitalization should be understood as a full-cycle institutional strategy rather than as a simple transfer of paper-based procedures into electronic form. Such a strategy should combine automated eligibility assessment, taxpayer digital identity, risk-based compliance, inter-agency data exchange, performance dashboards and public reporting of tax expenditures. A conceptual model of a digital tax incentive management platform is proposed for developing economies, with particular attention to Uzbekistan’s ongoing tax administration reforms, e-invoicing, automated reporting and digital public-service agenda. The results show that digitalization can reduce administrative costs, limit discretionary decision-making, prevent misuse of incentives and increase the measurable economic return of fiscal support instruments.