Making Tax Smart: Feasibility of Distributed Ledger Technology for Building Tax Compliance Functionality to Central Bank Digital Currency
The latest advancements in distributed ledger technology (DLT) and payment architectures such as the UK’s New Payments Architecture present opportunities for leveraging the hidden informational value and intelligence within payments. In this paper, we present Smart Money, an infrastructure capabilit...
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MDPI AG
2024-10-01
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| Series: | Applied System Innovation |
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| Online Access: | https://www.mdpi.com/2571-5577/7/6/106 |
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| author | Panos Louvieris Georgios Ioannou Gareth White |
| author_facet | Panos Louvieris Georgios Ioannou Gareth White |
| author_sort | Panos Louvieris |
| collection | DOAJ |
| description | The latest advancements in distributed ledger technology (DLT) and payment architectures such as the UK’s New Payments Architecture present opportunities for leveraging the hidden informational value and intelligence within payments. In this paper, we present Smart Money, an infrastructure capability for a central bank digital currency (CBDC) which enables real-time value-added tax split payments, oversight, controlled access, and smart policy implementation. This capability is implemented as a prototype called Making Tax Smart (MTS), which utilises the open-source R3 Corda DLT framework. The results presented herein confirm that it is feasible to build an MTS capability which is scalable and co-exists with the current payment systems. Smart Money CBDC has the potential to mobilise payments data, transforming the role of money from a blunt instrument to a government policy sensor and actuator without disrupting the existing money system. DLT, smart contracts, and programmable money have a crucial role to play with benefits for government departments, the economy, and society as a whole. |
| format | Article |
| id | doaj-art-3a2c082bd2e9441abb36db6b0d0a80ae |
| institution | OA Journals |
| issn | 2571-5577 |
| language | English |
| publishDate | 2024-10-01 |
| publisher | MDPI AG |
| record_format | Article |
| series | Applied System Innovation |
| spelling | doaj-art-3a2c082bd2e9441abb36db6b0d0a80ae2025-08-20T02:00:59ZengMDPI AGApplied System Innovation2571-55772024-10-017610610.3390/asi7060106Making Tax Smart: Feasibility of Distributed Ledger Technology for Building Tax Compliance Functionality to Central Bank Digital CurrencyPanos Louvieris0Georgios Ioannou1Gareth White2Department of Computer Science, Brunel University of London, London UB8 3PH, UKDepartment of Computer Science, Brunel University of London, London UB8 3PH, UKDepartment of Computer Science, Brunel University of London, London UB8 3PH, UKThe latest advancements in distributed ledger technology (DLT) and payment architectures such as the UK’s New Payments Architecture present opportunities for leveraging the hidden informational value and intelligence within payments. In this paper, we present Smart Money, an infrastructure capability for a central bank digital currency (CBDC) which enables real-time value-added tax split payments, oversight, controlled access, and smart policy implementation. This capability is implemented as a prototype called Making Tax Smart (MTS), which utilises the open-source R3 Corda DLT framework. The results presented herein confirm that it is feasible to build an MTS capability which is scalable and co-exists with the current payment systems. Smart Money CBDC has the potential to mobilise payments data, transforming the role of money from a blunt instrument to a government policy sensor and actuator without disrupting the existing money system. DLT, smart contracts, and programmable money have a crucial role to play with benefits for government departments, the economy, and society as a whole.https://www.mdpi.com/2571-5577/7/6/106CBDCtax complianceDLTprogrammable money |
| spellingShingle | Panos Louvieris Georgios Ioannou Gareth White Making Tax Smart: Feasibility of Distributed Ledger Technology for Building Tax Compliance Functionality to Central Bank Digital Currency Applied System Innovation CBDC tax compliance DLT programmable money |
| title | Making Tax Smart: Feasibility of Distributed Ledger Technology for Building Tax Compliance Functionality to Central Bank Digital Currency |
| title_full | Making Tax Smart: Feasibility of Distributed Ledger Technology for Building Tax Compliance Functionality to Central Bank Digital Currency |
| title_fullStr | Making Tax Smart: Feasibility of Distributed Ledger Technology for Building Tax Compliance Functionality to Central Bank Digital Currency |
| title_full_unstemmed | Making Tax Smart: Feasibility of Distributed Ledger Technology for Building Tax Compliance Functionality to Central Bank Digital Currency |
| title_short | Making Tax Smart: Feasibility of Distributed Ledger Technology for Building Tax Compliance Functionality to Central Bank Digital Currency |
| title_sort | making tax smart feasibility of distributed ledger technology for building tax compliance functionality to central bank digital currency |
| topic | CBDC tax compliance DLT programmable money |
| url | https://www.mdpi.com/2571-5577/7/6/106 |
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