The Excise Department, part of the Ministry of Finance in Thailand, plans to provide a way for oil exporters to be refunded when they have overpaid taxes via a new mechanism that intends to prevent any kind of leakage, Bangkok Post reported on 25 November.
Director-general Patchara Anuntasilpa explained that the new method will use blockchain technology and will be adopted by the middle of next year.
With the intended blockchain tax refund platform, all oil exporters will be required to pay excise tax and claim any exaggerated taxes after the fuel has been already shipped. This way, the Excise Department will be able to conduct more careful payment inspections.
As Anuntasilpa explained, at present all oil exporters are obliged to present the necessary documents to the tax waiver and the probe is not that thorough. According to him, the upcoming refund process will save lots of time for oil exporters on the completion of the documentation process.
The Excise Department is in discussions with Krungthai Bank (KTB) for delviering the new blockchain rebate platform.
It is said that the excise tax discharge for oil exports is around 6 billion baht (around $198,500,000) a year and the new mechanism can generate even more costs to operators. On the other hand oil exporters demand a method that will refund taxes faster.
An anonymous source, part of the government department, shared that the upcoming modification of the tax system will give enough time for improved tax checkups and should counter any attempts for smuggling of exported oil that is then sold locally, while still receiving the appropriate tax benefits.
The Excise department is partnering with KTB in bringing their services to the digital world. Except towards the blockchain platform for oil tax refunds, their mutual work is aimed at three other major projects such as e-bank guarantees and yearly fee payment for liqueur, probably connected to the state Liquor Distillery Organization (part of the Excise Department) and tobacco and playing card delivery licenses that are probably connected to the state Playing Cards Factory, which is also part of the department.
With the help of blockchain, the Excise department will not only be able to access the needed data faster and more accurately, but will also improve its security.
The effectiveness in data management will be largely upgraded as it will verify all adjacent processes. This includes the whole oil transportation path from refiners and depots to the final destination.
When the fact that using the blockchain system will allow all processes to be checked and verified at any moment is taken into consideration, it is expected that the whole refund process will be accelerated at least by three times. In addition oil tax leakage should be seriously reduced, if not blocked completely.