Minimization of the impact of the shadow economy as a strategic direction for ensuring the financial and economic security of Ukraine

The subject of the study. This study conducts a comprehensive analysis of the theoretical and practical foundations for ensuring the financial and economic security of the state in the context of minimizing the impact of the shadow economy. Contemporary scientific approaches to defining the essence of financial and economic security are reviewed, alongside methodologies for assessing the scope and consequences of the shadow economy's operations. The research establishes that the shadow economy exerts a significant detrimental effect on the state's financial stability, undermining the effectiveness of fiscal policy, weakening budgetary discipline, reducing state budget revenues, and posing substantial risks to socio–economic development. The shadow economy is shown to complicate the implementation of state tax policies and hinder equitable resource distribution.Research methods. The study emphasizes the necessity of a comprehensive approach to state regulation aimed at reducing the influence of the shadow economy. It substantiates the importance of integrating theoretical and practical mechanisms to promote economic detinization. Key directions for strengthening financial and economic security include: reforming tax administration through simplified procedures, enhanced transparency, and increased efficiency; implementing modern technologies for the automation of financial and administrative processes to ensure robust oversight of economic transactions; and fostering a conducive environment for legitimate entrepreneurial activities through economic incentives and improvements in the legal framework. These measures aim to reduce incentives for participation in shadow schemes and promote a transparent economic system.Results of the work. The findings hold significant practical value and can be utilized by state authorities in developing strategic and operational measures to ensure financial stability and sustainable economic growth. Conclusions. The proposed recommendations facilitate the creation of a cohesive regulatory framework that addresses contemporary challenges related to globalization, digitalization, and economic transformation, while effectively countering the shadow economy.