Blockchain undergoes tests for tracking VAT payments
The Revenue Department is testing 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 distributed ledger for tax probes if the technology is adopted.
The department wants to use blockchain technology to prevent VAT refund fraud, said director-general Ekniti Nitithanprapas.
Blockchain is expected to help verify VAT invoices, he said, which would help root out fake invoices for VAT claims.
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.
To prevent tax evasion and fraud, the Revenue Department has set its sights on adopting machine learning and using artificial intelligence to learn and study tax-cheating practices to efficiently examine tax payments and compel more people to enter the formal tax system, Mr Ekniti said.
Adoption of new technologies like big data and a digital tax collection system is a priority for Mr Ekniti, who aims to use innovation to boost efficiency and enlarge the taxpayer base.
In related news, Mr Ekniti confirmed that the Finance Ministry's requirement to use financial accounts submitted to the Revenue Department in commercial banks' loan approval process for small and medium-sized enterprises (SMEs) will be enforced as scheduled on Jan 1.
Under the single account scheme, the central bank requires banks to give greater consideration to financial statements submitted to the Revenue Department when considering SME loans.
But the requirement has stoked concerns that the single account scheme will lessen access to finance for most SMEs, which tend to use more than one financial account and submit the account with the least value to understate or avoid tax while turning in the best one for loan applications from financial institutions.
Chakkrit Parapuntakul, president of the Federation of Accounting Professions, said recently that the central bank was considering whether to let banks demand additional collateral for loans extended to SMEs that are unable to fully comply with the single account scheme.