Giant Tencent has entered into a partnership with the Shenzhen City Tax Authority, following which the Chinese will use blockchain technology to fight tax evasion, according to CoinDesk. The Shenzhen and Tencent National Bureau of Taxation announced on Thursday that they set up an innovation lab called "Intelligent Fee," which promotes the technological innovation underpinning taxation processes.
The lab will combine theoretical research with innovative technologies such as cloud, artificial intelligence, blockchain and Big Data to change the way charging and collection work.
Shenzhen has a whole underground economy, according to the New York Times. Several economic actors use fake bureaucracy for tax evasion, and detecting fake documents is a difficult challenge for tax collectors. According to statements by Ma Huateng, CEO of Tencent and chair of the Board, Intelligent Taxation Laboratory is already working on a new digital system based on blockchain technology.
Within this system, all receipts for goods and services would be issued in digital format and would remain forever written in the blockchain. The product will be based on the blockbuster platform developed by Tencent, announced in April, and is the first time China adopts this technology in a public system.
Li Wei, deputy director of the Shenzhen National Bureau of Taxation, argues that the main features of this system are security and complete traceability of payments, which will help identify fake documents.