The Revenue Department of Thailand, in 2014, has arrested people and about 60 companies in case of a fraud where the department lost around $18.29 million worth of baht in just value-added taxes (VAT). Since then the Revenue Department of Thailand failed to keep a track on the tax defaulter, which led to a loss of billion dollars in the whole process.
Ekniti Nitithanprapas revealed in the Bangkok Post that the Department of Revenue is conducting a trail on blockchain to see if it fits well in tracking the VAT payments. The director general further said that the number of fake VAT invoices cases has increased in large number. A separate innovation lab has been designed to test the potential of blockchain in order to minimize the cases. He said that blockchain can be beneficial in verifying the VAT invoices, which will ultimately reduce the fake invoices for VAT claims. He continued:
“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.”
Blockchain – A Leading Technology
Blockchain has been outlining in the tech industry; both in hype and investment-influx since the day it was launched. Various firms and public bodies are getting attracted to use the technology for its core attributes such as security real-time info, and transparency.
PwC which is one of the Big Four auditors said that blockchain can also be used for detecting errors and other VAT frauds in the most effective way. He stated that blockchain makes it easier to detect the frauds and errors because the system provides more transparent and effective information regarding the items and transactions in the network. Therefore, it could be more useful in tracking the VAT process; where it has been paid, and where it has to be paid. Overall, it will boost the system in reducing the frauds in VAT.