Blockchain and Its Implications for Tax Administration in the People’s Republic of China

Abstract

The extraordinary technological advances that have taken place since the 1990s have been termed the Fourth Industrial Revolution. This phenomenon is characterized by emerging technologies that are blurring the lines between the digital, physical, and biological realms. The use of the latest technologies, especially blockchain, has changed the existing paradigm in tax administration in many jurisdictions. This chapter considers the current and potential impact of these changes from the perspective of improved tax administration and enhanced compliance, using the People’s Republic of China as a case study. This chapter dissects the development of blockchain technology in the People’s Republic of China’s tax administration since the early 2010s and analyzes its prospects and limitations in fostering the modernization of tax administration in the country. It concludes that blockchain could be a promising solution to tax administration and compliance challenges, particularly those related to information accuracy, transparency, and accessibility, but is limited in overcoming other challenges, such as administrative capacity-building.