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The main reason that the Inland Revenue is interested in implementing the blockchain for VAT payments is to eliminate fraud in the system. (Photo of Bangkok Post)
The revenue department is testing the blockchain to track value-added tax (VAT) payments in its innovation lab, putting Thailand on the path to becoming the first country to use the distribution register for tax probes if the technology will be adopted.
The department wants to use blockchain technology to prevent fraud on VAT reimbursement, said general director Ekniti Nitithanprapas.
Blockchain is expected to help verify VAT invoices, he said, which would help to eradicate false invoices for VAT declarations.
For example, when a company buys products from a second company, the first company will issue VAT invoices to the latter and both companies will be able to use blockchain to confirm transactions.
To prevent tax evasion and fraud, the Inland Revenue has set itself the goal of adopting automatic learning and the use of artificial intelligence to learn and study practices tax fraud to efficiently examine tax payments and force more people to enter the official tax system.
The adoption of new technologies such as big data and a digital tax collection system is a priority for Ekniti, which aims to use innovation to increase efficiency and expand the taxpayer base.
In related news, Ekniti has confirmed that the Ministry of Finance's obligation to use the financial accounts submitted to the Inland Revenue in the process of approving loans from commercial banks for small and medium-sized enterprises (SMEs) will be applied as planned. January 1st.
In the context of the single account system, the central bank requires that banks take greater account of the financial statements presented to the revenue department when they take into account loans to SMEs.
However, the requirement has raised concerns that the single account system will reduce access to finance for most SMEs, which tend to use more than one financial account and send accounts with the least value. to minimize or avoid taxes while turning the best loan applications from financial institutions.
Chakkrit Parapuntakul, chairman of the Federation of Accounting Professions, said recently that the central bank is considering whether to allow banks to request further guarantees for loans granted to SMEs that are unable to fully comply with the single account regime.
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