The Impact of Digital Transformation on Curbing Tax Evasion and Its Effect on Tax Revenue: A Field Study on the Libyan Tax Authority in the Eastern Region

Abstract

This study aimed to identify the impact of digital transformation on curbing tax evasion and its subsequent effect on tax revenue, through a field study targeting employees of the Tax Authority in Benghazi, specifically managers and tax auditors across various specializations, totaling (170) employees. To achieve the study's objectives and test its hypotheses, the research focused on three key dimensions of digital transformation: the accuracy of tax assessment processes, the efficiency of auditing and financial review operations, and the enhancement of transparency and data integration. Statistical analysis revealed that, from the perspective of the study sample, the level of implementation of digital transformation across these dimensions was high. Regression analysis results demonstrated a statistically significant positive impact of digital transformation on curbing tax evasion, thereby directly contributing to increased and improved tax revenue. Based on these findings, the study offered several recommendations, most notably: the need to strengthen electronic linkage systems and data integration between the tax authority and relevant entities (such as customs, banks, and the commercial registry); the expansion of modern technologies for data analysis and tax auditing; and the development of a comprehensive digital strategy alongside staff training to facilitate a gradual transition toward a fully digital work environment.