Digitalisation as a Strategy Against the Shadow Economy: Evidence, Mechanism Design and 2030 Scenarios for Uzbekistan

This study examines how the development of the digital economy can be used as a systematic instrument for combating the shadow economy, using Uzbekistan in 2017–2025 as the empirical setting. The paper proposes an integrated methodological framework that links digital instruments — electronic identification, cashless QR/POS infrastructure, electronic invoicing, online cash registers and open-API data integration — to formalisation, tax-base expansion and tax-gap reduction; estimates the determinants of the shadow-economy indicator on a regional panel and on sectoral data using log-linear regressions with an instrumental-variable correction for endogeneity; decomposes the change in the volume of the informal and hidden economy; and forecasts its dynamics to 2030 with an ARIMA(0,1,2) model and three policy scenarios. The share of the informal and hidden economy in GDP fell from 45.6% in 2017 to 34.3% in 2024 and 26.9% in 2025, while its nominal volume grew 3.13-fold in 2017–2024; this growth is fully explained by nominal GDP growth, the decline in the share reduced the potential volume by 173.2 trillion UZS, and the rising share of the hidden component added 13.8 trillion UZS of new concealed activity. On the regional panel, the number of active small businesses (elasticity +1.63) and wholesale turnover (+0.12) raise the shadow-economy indicator, whereas foreign-trade turnover (−0.34) and retail turnover (−0.05) reduce it. The effect of ICT-services value added falls from +2.06 to +0.87 after instrumenting, implying that digital services reduce informality only when they are bound to compulsory electronic reporting. A three-stage organisational-economic mechanism centred on a Digital Tax Hub with AI/Big-Data risk scoring and a 2×2 digitalisation–informality matrix for regional prioritisation are proposed.