Thailand’s Revenue Department Testing Blockchain To Prevent Tax Fraud

News | December 4, 2018 By:

The Revenue Department of Thailand is testing distributed ledger technology (DLT) in its innovation lab to track value-added tax (VAT) payments.

Local media outlet Bangkok Post reported that the Revenue Department wants to use blockchain technology to streamline tax refunding procedures and help the department check if taxes have been paid according to the requirements. Ekniti Nitithanprapas, director general of the Thai Revenue Department, said that blockchain technology will be used to verify whether taxes were paid correctly and to speed up the tax refund process.

“Blockchain is expected to help verify VAT invoices, which would help root out fake invoices for VAT claims,” said Nitithanprapas. “For example, when a company buys products from a second company, the former will issue VAT invoices to the latter, and both firms can use blockchain to confirm the transactions.”

In addition to blockchain, Nitithanprapas said that the department has also set its sights on adopting machine learning and using artificial intelligence (AI) to learn and study tax-cheating practices to efficiently examine tax payments and compel more people to enter the formal tax system.

The move is in line with Thailand’s initiative to modernize its tax system. Last year, the government released its National e-Payment Master Plan, which includes the development and implementation of an electronic tax system (e-Tax system). The e-Tax system is expected to streamline commercial transactions, cut storage and paper costs, and replace paper-based tax invoices.