The impact of the shadow economy on state security and ways to de-shadowing in war times

The article examines the impact of the shadow economy on the national security of Ukraine during the full-scale war and determines the key directions for its de-shadowing. The purpose of the article is to analyze the consequences of the influence of the shadow economy on the security of Ukraine and to identify directions for de-shadowing the economy in the context of full-scale military operations. It is established that the shadow economy, encompassing both legal and illegal economic activities, generates complex threats to the financial, social, political, and military stability of the state. Wartime conditions accelerate shadow processes due to economic instability, infrastructure destruction, weakened control mechanisms, corruption risks, and excessive taxation. The study proves that the expansion of the shadow sector leads to significant budget losses, reduces defense capability, distorts competition, undermines the rule of law, and erodes citizens’ trust in government institutions. The article emphasizes that the shadow economy not only weakens the financial system but also affects the moral and social resilience of society, which is vital during wartime. It is substantiated that counteracting the shadow economy is a strategic task for ensuring financial sustainability, effective resource allocation, and strengthening national security. The main directions of de-shadowing are identified: modernization of the tax system, digitalization of public administration, promotion of cashless payments, improvement of financial literacy, support for small and medium enterprises, development of transparent labor relations, and enhancement of anti-corruption policy. Special attention is paid to international cooperation and harmonization of Ukrainian legislation with European financial monitoring standards. The research concludes that only a systematic approach, combining economic, legal, and social instruments, can ensure the effective reduction of the shadow economy and increase the state’s resilience to external and internal threats. The obtained results have practical significance for the formation of national policy in the field of economic security and post-war recovery of Ukraine.