China To Use The Blockchain For Social Taxation And Issuing Electronic Invoices

Miaocai Network (miaocaiwang.com), a Chinese taxation system certified by the State Administration of Taxation to serve the citizens of China announced  the establishing of an Internet-baased finance and taxation service  platform and exchange. Partnering with the “government affairs  chain GACHAIN” to launch a GACHAIN-based tax electronic invoice and  social tax-collecting service, utilizing Fintech linked to China’s “National economic data security system.”

  A rough translation of the Chinese company website states: 

“Sight the financial network will use its own advantages,  together with the Shenzhen chain together, the social tax collection,  electronic invoices and other core business tax integration into the  government chain, the use of government chain can be regulated,  traceable, easy to transfer bills, tamper , High concurrent, and  external interfaces and other advantages, without increasing the cost of  transformation of the various departments under the premise of the  source from the electronic invoice to start, until the end of the flow,  corporate customers in the simplified process, easy to use at the same  time, Process, and the tax authorities can also immediately monitor the  origin of each electronic invoice, the public can check the authenticity  of each bill, so that the entire tax bill business is simple,  convenient and transparent, Good inhibitory effect. From the creation of the initial, that is, with the discovery of  trends, foresee the prospective strategic vision of the future, not only  from the technology and services for our customers to provide quality  products, but also efforts in the field of taxation on national  security, tax reform and other aspects of society  responsibility. Through cooperation with the government chain, the  network is expected to bring the subordinate chain of financial and  taxation applications will bring disruptive changes to the industry, but  also on the state taxation rectification work has brought a strong  boost. At the same time, we will use the chain-chain technology to provide  the public with an open, fair and just way to the public through the  network contract of the original fiscal and taxation entrepreneurs and  the financial and taxation service providers’ Transparent trading  market,” they wrote.

“China’s tax collecting procedures feature slow tax reporting times  and insufficient coordination. By making use of the unrivaled advantages  of blockchain technology, together with the GACHAIN team, we are  integrating core finance and tax business (such as social tax collection  and electronic invoices) into GACHAIN, and by taking advantage of  GACHAIN’s ability to regulate, trace back, and circulate documents  easily, prevent falsification, high rate of concurrency, and external  interface benefits, we can cover the entire process workflow from  electronic invoice generation through the end of the process without  increasing costs for those involved. Our corporate clients, while  enjoying the benefits of streamlined processes and ease of use,  simultaneously go through the tax reporting process, and taxation  authorities can monitor the route of every electronic invoice in real  time. The public can also check the validity of every document, thus  simplifying the entire business process, increasing convenience and  transparency, and putting a curb on invoice-related  problems,”ChainHold CEO Lin Wan told Coinfox. 

Wan further stated: 

“The difference between GACHAIN and existing blockchains lies in its  unique algorithm of Smart Law, which migrates existing policies, laws,  and regulations to GACHAIN and has a hierarchy of administration. All  smart contracts are administered within the framework of Smart Law and  developed separately in accordance with the needs of government bodies.  The business of the government bodies is handled separately as part of  an integrated organism. It’s safe to say that GACHAIN is a sovereign  blockchain that puts the decision making and regulatory rights into the  hands of the government, meanwhile enabling every citizen to control his  digital assets in GACHAIN. This will facilitate Chinese government  control over blockchain projects and ICO.” “Existing blockchain projects are disconnected from reality, and how  to link the blockchain network to reality is an issue for deep  consideration. I think that the key is to have government bodies  acknowledge what’s in the blockchain, such as copyright ownership, the  attributes of business organs, and property transactions, but with the  prerequisite that they must conform to laws and regulations. When these  two points are fulfilled, the blockchain and real world can be linked  seamlessly. GACHAIN is designed and developed with this concept in mind.  In other words, GACHAIN is – Blockchainn as Government Affairs. But  meanwhile, GACHAIN has the attributes of decentralization, where smart  contracts can be compiled, and one can protect his digital assets from  being stolen by any organization of power and issue ICO. Of course, ICO  must be approved by the regulatory body in GACHAIN.”

The design of GACHAIN effectively links the Chinese government with the blockchain. Over the years, the Chinese government has attached great importance to the emerging blockchain industry and listed it in the “Thirteenth Five-Year” National Informatization Plan. 

In June, China and Russia held their 7th Financial Ministerial Dialogue in Shanghai striking a $11 billion dollar funding deal. Additionally, while at the meeting, Russia’s development bank VEB signed an  agreement to attract 6 billion yuan or ($882.35 million) from China’s Development Bank for innovations, including the development of  blockchain technologies.

Already we are starting to see prospects that China is headed towards  preparing for the release of its own digital token. Even seeing earlier  last year a Chinese automaker Wanxiang’s invest $30 Billion dollars  into a smart cities initiative in Hangzhou using blockchain technology  Coindesk reported. 

While another U.S. and Japanese auto manufacturer Toyota is planning  to use blockchain to amass “driving data that will help develop  driverless cars,” Chris Ballinger, chief officer of Strategic Innovation  at Toyota, said in a statement.

China also announced last year with the blessing of the IMF that it was “ready to release a digital asset,” which Christine Lagarde added that “virtual currencies are extremely beneficial.” Shortly after the Shanghai meeting with Russia, China’s Central Bank – People’s Bank of China tested a national Chinese digital currency. 

If implemented it would be introduced alongside China’s primary currency the Renminbi (Yuan). China simulated possible economic scenarios and ran mock transactions using the cryptocurrency with some of its commercial banks. The Chinese economy is the second largest GDP in the world at $11 trillion only being beaten by the U.S. at $18 trillion GDP according to World Bank figures.

 While a new study conducted by PWC predicts that China will overtake the U.S. as world’s  largest economy before 2030 due to continued technology-driven  productivity improvements” like the blockchain. The months and long term years ahead for cryptocurrency will be  historic and very interesting indeed China seems interested are you?