Shenzhen Taxation Bureau To Use Blockchain To Combat Tax Fraudbr>
Chinese media and technology giant Tencent has partnered with the Shenzhen National Taxation Bureau to combat tax fraud using blockchain technology.
Tencent will work with the taxation department to establish an “Intelligent Tax” innovation laboratory focused on promoting technological innovation around taxation processes. The innovation lab will use cloud computing, artificial intelligence (AI), blockchain and big data to improve taxation management. The goal is to develop a solution that would enable the authorities to track the process of issuance and circulation of invoices.
“We hope to make every fapiao [official invoice issued by the Chinese Tax Bureau] checkable, verifiable, reliable and traceable, and use blockchain technology to manage the whole circulation process of fapiaos,” Tencent said in a statement.
In China, there is a large underground market for fake or cloned fapiao. Buyers use counterfeit fapiao to evade taxes or defraud employers. While there are no reliable estimates of how much money is involved in the trade, as the country’s economy has mushroomed and grown more sophisticated, so has the ability to falsify invoices.
Li Wei, deputy director of the taxation department, said that by helping to trace the source of an invoice, blockchain technology would help tax supervisors to verify its authenticity.
“The digital invoice based on blockchain technology has features such as complete traceability of the whole process and non-disruptive information, which consistent with invoice logic, can effectively avoid false invoices, and improve the invoice supervision process,” Wei said.
Pony Ma Huateng, Tencent’s chairman and chief executive, said the tax solution will be the first product that will be develop at the lab and the first application of blockchain technology in the handling of digital invoices in China.