Thai government to use blockchain for VAT refunds, bonds, procurement

Yesterday, Thailand’s Ministry of Finance announced three blockchain projects spearheaded by four agencies and in co-operation with Krung Thai Bank. The ministry has signed agreements to develop the initiatives and boost efficiency through the digitalization of processes.

Tourist VAT Refunds

The first project is for issuing value-added tax (VAT) refunds for tourists. According to the ministry, at least 2 million foreign tourists purchase goods and services in Thailand, amounting to about 50 billion baht ($1.66 billion) per year. On average, 200,000 tourists claim VAT refunds every month. Seventy percent come from China and usually do not hold cash.

The country’s Revenue Departments, Customs Department and Krung Thai Bank are developing a blockchain mobile application for tourists to apply for refunds. The goal is to increase transparency, security and prevent fake refund claims. It will also help streamline government operations by reducing paper-based documentation.

The ministry said the project has already been trialed and will be officially launched at the end of this month. It claims the VAT refund process will take much lesser time than the current process which takes about two months. The move is significant as tourism is one of the significant contributors to the country’s GDP.

Last year, Ledger Insights reported that the Revenue Department was testing blockchain to track VAT payments and prevent fraud by companies using fake invoices for deductions.

Government e-procurement

The second project is for government procurement of goods. The ministry is using blockchain for guarantees, to reduce collateral checks of entrepreneurs and boost the economy. To become a government supplier, it’s necessary to provide a guarantee such as for a performance bond or a bid bond. Hence the need for collateral checks.

Another aspect is credit scoring and confirmation for businesses to work with the government, which will be provided by Krung Thai Bank….

Source Link