Blockchain Technology Could Revolutionize Taxation

Blockchain Technology and Taxation

The latest buzzword in technology is Blockchain that you haven’t heard the last of. It may be too technical for many. Many years have gone and people have now begun to truly understand Bitcoin, and now they are petrified with the Blockchain technology.

Bitcoin, the world’s first decentralized cryptocurrency is the first large-scale application of the Blockchain technology.

For a newbie, Blockchain is an immutable digital transaction ledger, a repository where every stage of transaction is recorded which cannot be altered, and where data is secured from tempering and revision.

Latest Blockchain updates always include potential applications in financial transactions and real estate deals. However, recent talks around Blockchain  technology is about its application in the global taxation landscape.

Government tax administrations, corporate taxpayers as well as tax advisory organizations all could be a part of this revolution. Now the focus has shifted from Blockchain Technology in banking to taxation process, both at home and abroad.

Blockchain Technology and taxation in details

Blockchain is an open ledger for advancing trust. For taxpayers, it could be a positive change because it is highly efficient and less costly. Tax authorities could find opportunities in it because they collect money faster, gain more liquidity while having to pay fewer auditors.

Amidst all this, Blockchain developers will have the responsibility to serve, and validate that the Blockchain is working the way it should.

A lot of discussion is going around the potential uses of blockchain technology. While taxation is not always at the forefront of those discussions, its potential is slowly gaining recognition. Blockchain is potentially capable to create a fundamental change in taxation by allowing to keep a track of every single thread of a transaction in an immutable record.

Tax authorities are seriously taking these potential benefits and are actively involved in experimenting with Blockchain-based solutions for auditing and filing taxes.

Also read: Blockchain Technology for Copyrights Protection

The country of Luxembourg has been extremely progressive and have invested significantly in a technology company called LuxTrust.

China is also reportedly planning to incorporate Blockchain technology into its tax collection process.

While there could be certain barriers in the form of new privacy concerns or the age-old resistance to change, the momentum behind Blockchain applications in taxation is hard to ignore.

For businesses at any level looking ahead for tax compliance in future, it’s good to consider Blockchain as the technology is here to stay.

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