Integrating Blockchain Technology in Tax Systems

The potential of Blockchain in tax systems has been noticed by many countries and has specifically raised interest in Georgia. Implementing Blockchain technology in the tax system will be a step forward in the Georgian reality. The Prime Minister’s initiative to integrate the technology within the system will raise awareness of the technology and bring positive benefits to the country in general. It will disrupt mismanagement of information as legal manipulation and alteration of information will be minimized.  Moreover, it could adjust the way we pay taxes, submit and store information and make it easier for the government to narrow the tax gap. Introducing Blockchain in the tax system would require extensive effort to implement in both governmental databases and network systems. 

Blockchain is a ledger of information that is replicated across computers that are joined in a Peer-to-Peer or P2P network. Initially created to support cryptocurrency, Blockchain can be used to sign contracts, documents, properties, patents, products and etc. The technology allows anything of value to be traded securely and transparently and has the ability to deliver reliable information to a large audience. Blockchain has evolved from being associated with Bitcoin to a technology that can revolutionize the way payments, data storage and transactions are conducted. 

As blockchain has raised buzz around the world, especially in the financial services and banking, in the long-term it can profit as a prospective technology in the tax system. The technology can provide traceability, transparency of transactions, control, security and real-time information. Moreover, it could cut costs between businesses, consumers and government. 

By Anna Zhvania