Daniel Halliday
May 30 · Last update 3 mo. ago.
Could blockchain be used to curb tax avoidance?
The Tax Justice Network recently released a report naming various UK territories as some of the worst tax havens in the world, as they are some of the most aggressive in helping corporations avoid or minimise the taxes they contribute back to society. This is of increasing interest to those in the UK considering the political push for Brexit was led by politicians offering tax havens as an example of future economic model for the UK, some of who are directly linked to companies or trust funds registered in some of the UK’s tax havens. This telling situation begs the question how can tax avoidance be minimised? Could technology, and especially revolutionary solutions such as blockchain, be used to maximise transparency and accountability in tax systems?
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There are other more reasonable first steps
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There are other more reasonable first steps
Using Blockchain to address tax avoidance would not work, it would prove too expensive and too difficult, in essence requiring a whole new taxation system, and may not even address other common taxation grey areas such as companies misrepresenting losses/profits in order to minimise their taxes. A cheaper and quicker measure to take would be to transition toward a “unitary taxation” system which could solve this problem legislatively by taxing corporations in the regions they do business, not in the region in which they maintain their headquarters. The Tax Justice Network itself names unitary taxation as the best solution for international tax havens and this could easily be a better first step forward in addressing tax avoidance.
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