The Thailand Excise Department is now working with Krungthai Bank to develop a blockchain tax refund system.
25 November 2019 | AtoZMarkets – According to the Bangkok Post, the Thailand Excise Department is planning to create a new method to handle oil exports. They are, however, looking at the possibility of using blockchain for this purpose.
The director-general of the Excise Department Patchara Anuntasilpa said that they are looking forward to using blockchains to refund overpaid taxes to entities exporting oil from the country. He said also that the solution could be deployed by the mid-2020. The tax payback system allows oil exporters to pay an excise tax to the authorities and claim a refund after they ship oil. It will make tax payments more transparent and ensure that exporters do not overpay.
Thailand authorities exploring blockchain for oil exports
According to Patchara, the current tax refund practice isn’t thorough. Exporters first submit their taxes and then submit additional documents to request a tax waiver. This takes time, and the inspection by the department becomes very cumbersome. If exporters provide correct and complete documents, the refund time could be reduced manifold. The blockchain in question could be developed by Krungthai Bank (KTB).
Creating more efficient systems
The Bangkok Post cited sources within the department who suggest that a blockchain-based tax refund system will help in preventing smuggling of oil. He said that some entities send oil for exports but grab it back for sale in the local market. This provides them with higher profits while enjoying the tax benefits of exports. However, with a robust system like blockchain, the instances of such an event could be reduced.
The department currently provides over 6 billion baht in tax exemptions to oil exporters every year. The tax agency wants to reduce the length of the refund process, or it costs operators more. Therefore, they are looking for more innovative solutions to their refund issues.
However, the department is looking at a three-pronged approach to revolutionize their systems. They are working with KTB for three different pilot projects. They are dedicated to annual fee payments for tobacco, liquor, and playing card distribution licenses and e-bank guarantees. Distributed ledger technology will make data more easily accessible and upgrade the efficiency of the department’s systems. Sources suggest that it would help in improving the quality of service.
It will also be useful in improving data security at the department, making process verification easier and tracking oil moving from export hubs to destination countries. The department expects to reduce the processing time by 3x and reduce export oil leaks.
Earlier today, AtoZMarkets reported that Thailand’s Securities and Exchange Commission (SEC) has plans to amend cryptocurrency laws. The overall goal is to boost the growth of digital assets.
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