BLOCKCHAIN TECHNOLOGY AND KEY FEATURES OF ITS POSSIBLE IMPLEMENTATION INTO UKRAINIAN TAX SYSTEM

Анотація

The article deals with the study of the essence of Blockchain technology and its possible implementation into Ukrainian tax system. Taking into account current economic and political situation in Ukraine, the paper considers the advantages of Blockchain as one of the most prospective methods of improvements and at the same time simplifications in Ukraine's the tax system for both, the state and taxpayers. The main attention of the research was paid to the features of Blockchain implementation into tax administration exemplified as data structuring, Cost-efficiency, security (tamper detection), decentralized bookkeeping technology (transparency), verifying transfer pricing and applying smart contracts. The authors classified countries by criterion of using electronic invoicing in jurisdiction as follows as allowed, not allowed, not applicable and no regulation. It was defined that Blockchain technology owns the capacity to reconstruct accounting and automate the method of payments, transfer, and record-keeping of assets. The paper was focused on VAT collection and its return via Blockchain which might bring such benefits to tax system as transaction confirmation could be performed immediately; no duplication; lack of fraud and existing multi-dimensional check; increasing trustworthiness by using digital signature. The successful cases of Blockchain implementation into public services were considered namely pilot program in city Innisfil (Canada), in which local residents can pay their taxes in cryptocurrency; by using blockchain technologies, National Agency of Public Registry in the Republic of Georgia can provide its citizens with a digital certificate of their assets, supported with cryptographical proof published to the Bitcoin Blockchain; Exonum Blockchain could be considered as an intermediary layer between the back-end system and the front-end interface for users, where all transactions are verified using smart-contracts and then logged permanently into the blockchain. To conclude authors identified such potential benefits of blockchain implementation into tax administration as transactional costs reduction, a more streamlined, efficient and effective tax function.

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