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Chinese web giant Tencent has been given the thumbs up by China’s State of Administration of Taxation to create a draft for a blockchain-based invoice standard. Tencent will be collaborating with The China Academy of Information and Communications Technology and the Shenzhen Taxation Bureau to oversee the initiative.
The greenlighting comes in the wake of CCP leader Xi Jinping announcing on Friday the importance of blockchain and how it can streamline various operations within the country. An e-voice standardization using blockchain technology is in line with Jinping’s desire for a faster, secure, and transparent operation of agencies.
Aside from China’s tax officials, Tencent’s project has also gained the favor of various countries including the U.K., Sweden, Brazil, and Switzerland. The approval was given yesterday, Oct. 29, during the ITU-T international meeting on e-voice standards, Global Times reported.
Initiative reflects China’s recent blockchain announcement
This is but one of the many initiatives that China is planning moving forward, which is a great benefit for blockchain technology as other countries might follow suit if the endeavor yields promising results. Li Ming, director of the Blockchain Research Department at the China Electronics Standardization Institute, told Global Times that this represents the country's desire to implement blockchain application across multiple sectors.
“The project shows China's industry and market activity in blockchain tech application. E-invoicing is an appropriate field for blockchain application probes and trials currently, which could, in turn, promote tech development," Li said.
Tencent project could counter tax-fraud
An e-voice based on blockchain tech has several advantages. Among them is the ability to decrease – or even eliminate – tax evasion. Indeed, this project was initially created to counter tax fraud and was actually announced last year, CoinDesk reported.
China going down this route isn’t surprising for anyone who’s familiar with how vast the country’s underground economy is. The Chinese online underground economy alone is estimated to cost $852 million according to a paper titled “China and Cybersecurity: Espionage, Strategy, and Politics in the Digital Domain.”
The problem is so severe that sellers peddling fake receipts are brazenly hawking their business out in the open despite the fact that people have been executed for the crime. Now, it appears that China is trying to curb the issue by using the advancement of blockchain tech and its ability to provide a transparent and immutable ledger.
