A case study by a Western University law professor will look at how the use of blockchain technology could help close the Canadian sales tax gap, reduce compliance costs and improve government tax administration.
Jennifer Farrell, who teaches income taxation and international tax
law, has received a seed grant worth $21,292 for her project called
“Blockchain and taxation: A case study on eliminating the sales tax
gap” from the Western Social Sciences and Humanities Review Board.
The research aims to investigate the causes of sales tax non-compliance and examine how blockchain could tackle current problems with the use of smart contracts, recording real-time transactions and automatic tax submission to the Canada Revenue Agency, as well as look into the pros and cons of using blockchain for stakeholders (such as the CRA and taxpayers). It’ll also look into the topic from a regulatory perspective and discover what problems this could raise for policy makers.