Technology has transformative powers. It has the capacity to impact the way business runs. While Blockchain is definitely the new buzz and has the potential to impact the different industrial segments, but again we have to mention here that this technology is still at a nascent stage. There are many more developments waiting ahead. In this blog, we are going to discuss how Blockchain will benefit the tax system.
We all know that Blockchain is a distributed ledger technology that works on the peer-to-peer network providing a safe and secure platform for exchanging data and information. Some of the noticeable feature of Blockchain include:
2. No third-party intervention
3. Data encryption
These are some of the features that make Blockchain a universal technology. It thus becomes useful for most business operations. Whether it is food or finance, all the business operations can reap the benefits of these features of Blockchain.
Creating data transparency: One of the key features of Blockchain platform is that it offers transparency. This is something that can prove beneficial for the tax system. The major challenge is to access the full spectrum of information from a different business relevant to tax. With a Blockchain-based system, we can have a safe and secured platform that will allow the people involved in the audit and taxation work to easily access all the necessary information without any delay.
Verifying transfer pricing: Yet another area where Blockchain can prove helpful is verifying transactional taxes like stamp duties, VAT withholding tax, and insurance premium taxes. Blockchain can also be used for transfer pricing.
Data security: The next feature of Blockchain that can be useful for the tax regulators is safety and information security. All the data associated with taxation and taxpayers when stored on the DLT is highly secure and encrypted cryptographically, making all the information free from aby data breach and threat.
Blockchain can prove beneficial to the tax authorities as it provides accurate information that can be shared and allows earlier collection and oversight of transactions related to taxes. This way, Blockchain can impact the taxation system. Eventually, it will help in creating a system that is far safer and secure.
Blockchain developers and experts are studying the various ways in which the Blockchain can prove helpful to all the business segments. The taxation system is one of the areas where Blockchain can prove beneficial. There are other business segments like finance, healthcare and education, which are already using Blockchain technology.
Blockchain is definitely the future, and companies are widely investing in it to explore its benefits. Blockchain experts and developers play a key role in it, and hence there stands a great opportunity of growth for Blockchain experts.