Imperative Role of Blockchain in The Taxation System

Abstract

Today, governments levy various forms of taxes on economic activities, including revenue from wages or consumption of goods and services, as well as on properties, in order to obtain the funds necessary to pay their public expenditures and provide public goods and services. As a result, taxes have increasingly become a major source of public funding and a key fiscal weapon used by governments to promote or restrain economic growth and the development of specific economic sectors in many nations today. Block chain is made up of a dispersed database of informational blocks that are encrypted using specialized hashing algorithms to allow data monitoring. The purpose of this study is to look into the effects of using blockchain technology for taxation. In the study, the detailed explanation related to the usage of blockchain technology for taxation was presented. The review's findings support the study's conclusion that the legal and administrative studies are still being conducted to simplify tax administration, enable efficient revenue collection, and lower fiscal deficits. It is also concluded that blockchain has made taxation fast, accurate, and accessible to everyone and is helping in economic development. As a result of its transparency, blockchain technology will cause upheaval and innovation in global tax regimes. In the future work, we will be studying the implementation of blockchain for taxation by proposing an framework and also we will carry out the study to explain the blockchain usage in taxation in real time.