Public Finance in Modern Conditions: Problems and Challenges

The article focuses on the problems and challenges which public finance face in the period of digitalization. In recent years, numerous studies emphasised the changes taking place in the financial system under the influence of digital technologies. The article analyses public financial administration in the context of digitalisation. The main problems arising from the introduction of digital innovations in public finance are shown, such as insufficient efficiency in the management of budgetary resources, insufficient transparency and openness of budgetary processes, inefficient tax administration, high levels of public debt, also insufficient attention which is paid to the effectiveness of public programmes and projects, etc. Special attention was paid to the analysis of federal budget expenditures on the execution of the national project “Digital Economy”. A comparative survey of expenditures was carried out, and problems and shortcomings in the use of budget funds allocated for the implementation of the digitalization process were identified. The author of the article suggested a number of measures to improve public finances in the period of digitalization. In particular, it concerns the introduction of mechanisms for control and monitoring of expenditures’ efficiency, as well as strengthening cooperation between public institutions and the private sector in the field of digitalization. In addition, the author noted the need to stimulate economic growth through investment in education, application of innovations in new production technologies, development of the country’s infrastructure and other priority areas, which contributes to growth of state revenues by increasing tax revenues and reducing social expenditures to support the population. Such proposals should take into account the specifics of digital economy and ensure its sustainability. In general, the article reveals the specificity and priority of solution of problems of public finance, the solution of which is significant for the state in the digital era.