Blockchain for Taxation?
Can blockchain technology provide solutions for taxation problems?
The only certainties in life are death and taxes, or so says the old adage. The problem, of course, is that death is usually a surprise, and taxation takes forever anyway. At least it used to. One company sees an opportunity to help governments implement, track, and receive taxes in real-time using blockchain technology.
The tax software company Vertex, Inc., has suggested using the powers of the blockchain in order to provide benefits for governments to streamline and clear taxes. Currently, taxes are collected by merchants at the point of sale, and are then collated and delivered to the local or municipal or state government in lump sums. All transactions are then evaluated and processed by the government and totals are cross checked. Any point of difference results in an audit of some capacity. This audit system requires large amounts of manpower and cost, and generally can result in little or no outcome for either party.
Vertex, a tax technology company by trade, is looking to build blockchain into the point of sale, allowing tax to be collected immediately, delivered to the government in real-time, and virtually eliminating the need for auditing by local officials. Whether this sort of solution is viable to governments remains to be seen, and the institutional fears about blockchain and cryptocurrency may keep it out of the market place. However, the solution appears to be a viable potential for solving issues with legacy systems.