This article was first published on Request - Medium
Request at .tax Blockchain Hackathon
From the 5th to 7th of April, we attended the .tax blockchain hackathon in Latvia to solve the problem of VAT fraud at a countrywide level. We were invited by the Latvian Ministry of Economics to participate, applying our technology to help reduce the grey economy while increasing the efficiency of tax collection.
The weekend was an opportunity to connect with industry experts from the Latvian Central Bank and State Revenue Services, gather market insights and of course, hack.
We’re pleased to announce that on Sunday, we took home the price in the best pitch category.
What we built
We created a solution that allows tax authorities to collect transaction data directly from the customer at the time of a transaction. This data gets stored on the Latvian government’s database and is backed up on the blockchain as proof of the transaction to ensure data integrity. This accomplishes 3 things:
- It eliminates the opportunity for business owners to manipulate the reported earnings from their cash registers by bypassing them at the time of payment.
- It allows us to batch transactions before putting them on-chain to maintain an extremely high throughput — something of key importance to a country that has 1.2 billion transactions per year.
- It allows the Latvian government to see the macro statistics of their economy in real-time and have an immutable ledger to compare against reported taxes, ensuring protection against misreported revenue.
Actors in the schema above:
- The merchant using his Point-Of-Sale (POS)
- The customer using his smartphone
- Latvia’s tax authorities system
Step by step schema explanation:
- The customer scans the QR code displayed on merchants POS with her/his phone, reading the signed request.
- After choosing her/his payment method and performing the payment, the customer sends the completed request to the SRS API.
- When triggered by step 2, the SRS API ...
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Request - Medium