Jan 5, 2019 07:10 UTC
Jan 5, 2019 at 07:10 UTC
Chile Planning to Use Blockchain to Collect Taxes
Chile’s Treasury Department has come up with an idea to incorporate blockchain into their tax collection system. This decision was taken after looking at the losses incurred during the transaction processes related to tax collection.
Also, such an implementation can help the department streamline the process of tax collection. When the citizens pay their taxes, the money is passed to the municipality via banks.
The Treasury Department receives the details of the transactions only at the end of the month. By then a lot of information gets lost in the way. Involvement of three different organizations that operate in disparate ways creates complexities and confusion.
By implementing Blockchain technology, the Treasury Department plans to create an automatic quadrature system which will host multiple nodes. These nodes will be storing the transaction information and it will be incorruptible.
Any kind of meddling with the information will be detected in no time and the other blocks will reject such kind of action immediately.
The transactions will be stored in a block. This block stores the transaction information along with the details of the previous document’s address. It will generate a chain of blocks containing the information of that particular user. Once the blocks are created, every node receives it. This ensures transparency and will eliminate any foul play.
Ximena Hernández, the Treasurer of General Treasury of the Republic quoted:
“The Digital Transformation is an enormous opportunity that the General Treasury of the Republic has, for our role, our mission and for the quality of service that we have to deliver to our taxpaying users and our officials. Nowadays the Digital Transformation will allow us to be much more efficient, more effective, to have greater proximity to our taxpayers and thus also to our own users. We will be able to give a better service. Technology is present and must be used, but this will imply that we have to manage changes, break paradigms. The Digital Government team is supporting us on that, we have four projects, starting with blockchain, which will allow us traceability to all operations, security of information”
Blockchain getting introduced to the tax-collection system is a positive sign that governments are integrating the technology into their processes.