Tech firm Tencent has partnered with the Shenzen Municipal Office of the State Administration of Taxation, in an official announcement dated May 25th. Their partnership is aimed at establishing an “Intelligent Tax” Innovation Laboratory. This will focus on tax management modernization and stopping tax fraud using blockchain technology.
The new organization will employ several tech tools at its disposal, such as cloud computing, artificial intelligence, blockchain, and big data in their mandate to improve tax management and find a technological solution to fraudulent fapiao, according to a report from the China Money Network.
The fapiao is a type of official invoice issued by the Chinese Tax Bureau for goods and services purchased in the country. This helps the government track tax payments. However, there is a large, thriving illegal market for counterfeit fapiao. Buyers use fake receipts to evade taxes or defraud their employers, by claiming false expenses for which they are reimbursed for.
According to reports from the China Money Network, sellers of fake fapiao can be found easily in crowded urban areas.
The digital invoice solution that will be based on Tencent’s blockchain will be the first product of the laboratory, and will also be China’s first blockchain -based research on the application of blockchain tech to invoices. Li Wei, deputy director of the Shenzhen Municipal Bureau of State Taxation, said:
“The digital invoice based on blockchain technology has features such as complete traceability of the whole process and non-disruptive information, which consistent with invoice logic, can effectively avoid false invoices, and improve the invoice supervision process.”
Tencent has been using its technology to help local tax bureaus in China since 2015. Shenzen residents can use WeChat to pay taxes and get fapiao.
Earlier this week, the government’s Ministry of Industry and Information Technology published a Blockchain Industry White Paper, where they revealed that the domestic blockchain industry saw growth in 2017. The Ministry’s report also states that blockchain tech has risen to the level of a national science and technology strategy, saying that the country’s regulatory framework for blockchain has “gradually improved”.