Blockchain in the works for oil exports
published : 25 Nov 2019 at 07:00
newspaper section: Business
writer: Wichit Chantanusornsiri
The Excise Department will devise a method to refund overpaid taxes to oil exporters in a manner that stems leakages, its chief says.
The change in the tax refund practice will use blockchain, which the department plans to adopt by the middle of next year, said director-general Patchara Anuntasilpa.
The blockchain-based tax payback system requires oil exporters to pay excise tax to the department and claim overpaid taxes after they ship the fuel, he said. The new technology will let the department inspect the tax payments thoroughly.
The current practice requires oil exporters to submit documents for the tax waiver and the inspection is not as thorough as it could be, Mr Patchara said.
He said the tax refund process will take a shorter time if oil exporters file complete and correct documents.
The department is in talks with Krungthai Bank (KTB) on setting up the blockchain-based tax refund system.
A source in oil trading circles said the excise tax exemption for oil exports amounts to 6 billion baht a year, and the new practice could create further costs to operators if the tax-collecting agency's tax refund process is lengthy.
Oil exporters want the department to create a system that can refund taxes rapidly, said the source, who requested anonymity.
A second source who is employed at the department said the change in the tax payback system will enable the department to better inspect tax payments and prevent operators from smuggling exported oil for local sale while still enjoying tax benefits.
The department has joined with KTB to adopt blockchain technology to upgrade services on the digital platform. Blockchain technology for exported oil tax refunds is one of three pilot projects, alongside e-bank guarantees and annual fee payment for liqueur, tobacco and playing card distribution licences.
Blockchain technology will strengthen security and let the department access data quickly and accurately, upgrading services in a more transparent and effective manner, the second source said.
The technology will improve efficiency in data management, as it can verify processes thoroughly, starting from oil transported from refiners to depots and finally destination countries.
Given that all processes can be checked at any given point, and the technology can streamline the inspection process and enable immediate verification, the blockchain-based tax refund system is estimated to speed up the process by three times and efficiently reduce export oil tax leakage, the second source said.
- oil exporters
- tax refund