There is no denying the fact that the contemporary crypto industry lacks successful use cases of its backbone technology. This is the main reason, apart from the high volatility of cryptocurrencies, why the process of blockchain adoption has been moving only slightly faster than at a snail’s pace.
But as they say, little strokes fell great oaks, and one of these strokes has been made by the government of Thailand that came up with the initiative which stipulates for the implementation of the blockchain technology in the system of the overpaid tax refund. The intended practice will apply to the oil industry of the said country.
Last week, Patchara Anuntasilpa, the executive director of the Excise Department of the Southeast Asian country, told one of the major local news outlets that the agency that the new tax refund system, which centers around blockchain, will replace the current one that has proven to be inefficient. The official launch of the improved system should take place in the second quarter of 2020.
The executive elaborated that the new mechanism will work in the following way: an oil exported will have to pay a special excise tax before the produced oil is being shipped to a domestic or a foreign customer. After that, the producer can apply for the overpaid tax refund. The actual tax reimbursement will be conducted via the blockchain-enabled system that should greatly complement this process by making it more swift, transparent, and cost-effective. This, in effect, will facilitate the work of the Excise Department and make the procedure of tax refund virtually seamless.
Right now, Patchara emphasized, all oil exporters are obliged to file an application for tax waiver and wait for weeks for its to be processed. Moreover, the backwardness of the current system doesn’t allow for the necessary meticulous inspections.
The revamped system represents the joint effort of the Excise Department and Krung Thai Bank, one of the biggest domestic financial institutions. Krung Thai Bank is a licensed establishment owned by the state, which boasts more than a thousand branches across Thailand, and was repeatedly named the Best Trade Finance Provider.
Lastly, the executive director revealed that this initiative constitutes only the first of three pilot projects, the other two being the systems for the issuance of electronic-banking guarantees and the yearly payment of the alcohol & tobacco excise duties. However, Patchara chose to withhold any further information about the other pilot projects, perhaps out of superstition.
As it turns out, the major Thai oil and gas companies haven’t been sitting idly while the government representatives went around boasting about their innovative approaches. PTT, the largest oil corporation in Thailand, had partnered with Energy Web Foundation, a Switzerland-based NGO that develops blockchain solutions for the energy sector, and created a platform for the certification of sources of renewable energy.
Previously, Thailand had an imbalance between the actual volume of electricity produced from renewables and the number of renewable energy certificates (I-REC). The new platform should fix this discrepancy and bring these numbers into compliance with the current levels of supply and demand.
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