China has just seen the launch of its first blockchain-based tax invoice system in the Guangdong province capital of Guangzhou, as regulators turn to fintech to more effectively prevent fapiao-related fraud.
According to Southern Metropolis the blockchain invoice system has just commenced operation in the Huangpu district of Guangzhou and the Guangzhou Development District.
The Shui Lian (税链) or “Tax Link” system will help to ensure the authenticity of digitised tax invoices, also referred to as fapiao in Chinese, by maintaining a comprehensive log of data on both issuers and recipients.
This will in turn enable taxation authorities and tax payers to inspect, verify and track invoices, in order to better prevent fraud and malfeasance.
The Guangzhou municipal tax department led the development of the Shui Lian platform, which make use of the Alibaba Cloud system.
Fraud in relation to tax invoices a massive problem in China, with state-owned television reporting that there were 18,000 cases involving the issuance of counterfeit fapiao in 2017 alone.
“The use of blockchain keys and decoding methods means that the identity of taxpayers is kept consistent,” said Xu Zhengjun (徐正军), chair of Fangxin Keji Co., Ltd. (方欣科技有限公司), the company behind the Shuilian platform’s technology.
“This ensures that fapiao data is not leaked or illegally used…blockchain data cannot be tampered with, ensuring the accuracy and completeness of fapiao data.”
Since 14 June a total of 11 enterprises have joined the Shuilian blockchain invoicing system in Huangpu district and the Guangzhou Develompent District, including Guangzhou Gas Group Co., Ltd. (广州燃气集团有限公司).
“Each month we issue 7 million digitised fapiao,” said a Mr. Li, vice-general manager of the Guangzhou Natural Gas finance department.
“This requires arrangements for specialist personnel to track the flow of fapiao, for which the workload is immense.
“After joining the Shuilian platform, the system can provide real-time monitoring and control of the whereabouts of fapiao, issue automatic reminders to recipients, as well as create automatic backups of fapiao data, greatly reducing labour and equipment costs.”