Chinese social media giant Tencent Holdings Ltd. will use blockchain technology to help local tax bureaus fight tax evasion.
On May 24th, Tencent partnered with Shenzhen State Taxation Bureau to set up a smart tax lab, which will use cloud computing, artificial intelligence, block chain and big data to aid taxation management, including exploring the application in digital “fapiao” (tax receipts), and tax solution optimization, according to Tencent’s announcement.
A fapiao is an official invoice issued by the Chinese Tax Bureau for any goods or services purchased within the country. It helps track tax payments and deter tax evasion. But in China, there is a huge market for fake or cloned fapiao. Buyers of fake fapiao use them to evade taxes or defraud employers, because employees get reimbursed for some business expenses, such as taking their clients to dinner.
In Shenzhen, vendors selling fake fapiao can be easily found in crowded areas, such as subway exits, and in Huaqiangbei, the famous electric gadget market.
Blockchain increases the traceability and reliability of information. Tencent will use blockchain to connect all the relevant parties of a fapiao, which allows tax officials to trace the source of fapiao, verify authenticity of fapiao and check reimbursement information, to prevent taxpayers get reimbursed multiple times with one fapiao, or with fake fapiao.
Tencent has used its technology to assist local taxation bureaus since 2015. For example, Shenzhen residents can use Tencent’s social media app WeChat to declare tax, pay tax and get fapiao.
Source: www.chinamoneynetwork.com
