Thailand’s Finance Ministry is planning on implementing a blockchain-powered value-added tax (VAT) refund service for foreign tourists. The initiative will kick off starting the end of November and will aim to cut down on the time and resources usually associated with the process, Bangkok Post reported.
Every year, Thailand receives over 2 million foreign tourists who purchase goods and services in the Southeast Asian country. These tourists spend over 50 billion baht a year ($1.65 billion). Of the 2 million, over 200,000 claim the VAT refunds every month, with the majority of them being Chinese visitors who would rather not carry cash when travelling.
Thai Finance Minister Uttama Savanayana signed a memorandum of understanding together with Krung Thai bank. The government will work with the bank to apply blockchain in three pilot projects.
The minister remarked, “The blockchain technology for VAT refunds should speed up the process for tourists as details of their purchases will be immediately shared with the Revenue Department and the Customs Department once shops key in the information in the system.”
The foreign tourists will be able to claim their VAT refunds by filling in an application form starting November 28. They will be required to identify the channel they wish to receive their money back, such as credit card or WeChat, the minister explained.
The ministry believes that the use of blockchain will reduce the document verification process and help the government save over 10 million sheets of paper a year. It will also cut down cash management costs and reduce the congestion at VAT refund counters.
The VAT refunds are the third sector where the Thai government is integrating blockchain technology. It has also been working on blockchain-powered issuance of scripless savings bond. The first savings bond issued on the blockchain will be available in May next year.
The minister stated, “The Public Debt Management Office plans to allow people to download Bond Direct applications to purchase savings bonds, with values starting from one baht ($0.033).”
Thailand has continued to explore the use of blockchain technology and digital currencies, keeping up with other countries in Southeast Asia including Singapore and the Philippines. As CoinGeek reported recently, the country has been working on the issuance of a CBDC and will release a joint report with Hong Kong on this by Q1 next year.
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