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Federal Tax Service of Russia Federation plans to switch to blockchain

The Federal Tax Service (FTS) is going to take a second step after launching of online cashier’s offices, which will eliminate a declarative mechanism of work with companies.

It will significantly simplify a circulation of documents, it will leave a need to maintain a large staff of accountants and increase the effectiveness of the system as a whole. This was reported at a press conference by Deputy Head of the FTS Daniel Yegorov.

The FTS is going to realize its revolutionary plan through a use of advanced blockchain technology (decentralized database, on which Bitcoin cryptocurrency works).

According to Daniel Yegorov, the use of the blockchain technology for declaration rejecting will be the next strategic move after introduction of online cashier’s offices, which will be launched in 2018. The technology will allow the entity to create a distributed storage system featuring user identification and secured access.

Deputy Head of the FTS said that the current scheme is ponderous and creates a lot of nuisance to all participants.

"Taxpayers strike deals, have their operations, execute relevant documents, put it all in their computers, post it, use analytics and then synthetics, then it ends up in their tax returns, then they give it to us, and we start unwrapping it all again," Daniel Yegorov told about a complexity of the current information exchange with a tax service. "And now, let’s assume a situation, where we can smoothly, accurately, automatically data we get from a tax service. And this data is not checked when it comes to us, but when it starts to form on a board of taxpayers."

According to Daniel Yegorov, if a tax agency has an access to raw data, it is not necessary to submit declarations.

"If we end up using this kind of model, the tax service will balance the data itself, with the taxpayer just confirming it. It’s a breakthrough in terms of development of supervision," he added.

It should be reminded that a law on the launch of online cashier’s offices in 2018 was adopted in the midsummer of 2016. The transition to check-out equipment for newly registered equipment is scheduled for February 1, 2017, and for the currently used – for July 1, 2017.

Those, who have a right not to use check-out equipment must by July 1, 2018. In accordance with the adopted law, a buyer or service recipient will be able to receive a check not only in paper form, but also in electronic one.

Besides that, a VAT automated control system – VAT ACS-2 – has been working since last year. All tax declarations for VAT are submitted in electronic form, sales and purchase ledges is an annex to declaration and tax reporting is collected in data centers. Declarations for VAT go through automated cameral tax audit, upon the results of which, taxpayers, who made a mistake, have to provide clarifications on control ratio and data discrepancies of tax invoices.

VAT ACS-2 allows comparing buyer and seller’s data of invoices, building a chain of counterparties. The Marketing Director of BCS Broker Ruslan Smirnov is sure that the rejection of declarations is an ambitious and difficult project, the success of which does not depend on technological solutions primarily, but on political will and speed of receipt of all necessary approvals from various agencies and departments.

"In case the government does decide to improve the efficiency of tax accounting system radically, which is quite reasonable, since the blockchain can save on administration data significantly and ensure any inspections and audit in real time, technology partners will be found very quickly, there is a number of companies on the market, which can provide similar services to large public and private entities," Smirnov said.

Ruslan Smirnov reminded that the blockchain technology is already used by the National Agency of Public Register of Georgia and the back office of Citibank.

"Although, it seemed at the beginning of the year that implementation issues of blockchain would be topical only in a few years," Ruslan Smirnov said.

Co-Chairman of “Delovaya Rossiya” Anton Danilov-Danilyan agrees that it will help business to reduce costs, because to connect an accountancy to the FTS service is cheaper that to have a staff of accountants, who draw reports for the tax service.

"Long gone are the days when it was worth for honest entrepreneurs to hide something from the tax service. Therefore, it will be interesting for conscientious entrepreneurs and it will reduce costs," Anton Danilov-Danilyan said.

However, Anton Danilov-Danilyansees two factors that can delay the use of the blockchain. It is a necessity to spend more time on testing of existing technologies of electronic exchange of tax information and agree upon possibilities of use of the blockchain with the Central Bank.

The press service of the Central Bank noted that the technology of distributed ledgers was not prohibited by the Russian legislation and it was used at the discretion of the companies or agencies. The Bank of Russia does not mind to use the blockchain. On Thursday, a regulator announced the launch of “Masterchain” prototype (information exchange system between banking market’s participants).

The official representative of the Ministry of Finance told reporters that the idea deserved attention.

"It is necessary to estimate efficiency and technical capacity of its implementation," he added.

Source: coinspot

  • January 9, 2017 5:09 PM MSK