Using AI in public finance: opportunities and risks for EU integration

Abstract

The article examines the use of AI technologies in public finance in Ukraine in the context of integration into the EU. The introduction of AI is seen as a digital transformation tool that can increase transparency, reduce the risk of fraud, and ensure that Ukrainian financial processes are adapted to the requirements of the AI Act. The research methodology combines the methods of monitoring, comparative legal analysis, content analysis, and step-by-step detailing. The source base includes scientific papers, reports of international organisations, and EU regulations. As a result, it is found that the chronic budget deficit of Ukraine, which worsened after 2022, requires the introduction of innovative approaches to financial management. The potential of AI in taxation and financial modelling is analysed, and its positive effects are identified such as automation, time saving, improved analytical accuracy, and reduced risk of fraud. However, the risks associated with cybersecurity, data quality and high implementation costs are outlined. Based on the content analysis, a step-by-step algorithm for introducing AI into the financial administration of Ukraine is created, taking into account the requirements of the AI Act. The suggested algorithm can become the basis for harmonising Ukraine's financial management with EU standards and facilitate effective digital transformation of the public sector. The use of AI in public finance is seen as a strategic condition for European integration, ensuring transparency, accountability and stability of Ukraine’s financial system.