The Use of Blockchain Technology to Improve Transfer-Pricing Compliance and Administration in South Africa

Mariam Mia (), Jurie Wessels () and Saajidah Adam ()
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Mariam Mia: University of the Witwatersrand
Jurie Wessels: University of Johannesburg
Saajidah Adam: University of Johannesburg

A chapter in Towards Digitally Transforming Accounting and Business Processes, 2024, pp 357-378 from Springer

Abstract: Abstract The purpose of this study is to determine whether the inherent features of blockchain are suitable for use in easing the transfer-pricing compliance burden of taxpayers and in improving the administration of transfer-pricing for the South African Revenue Service (SARS). The paper considers the benefits, challenges, and practical considerations of using blockchain for transfer-pricing compliance in taxpayer businesses and for streamlining and simplifying the administration and auditing of transfer-pricing cases for SARS. The research took the form of a qualitative study which involved the review of relevant existing literature. An interpretative paradigm was adopted for this study which sought to identify the challenges faced by taxpayers and tax authorities and describe how blockchain technology can assist in remedying these difficulties. A content analysis of various credible sources was conducted in the context of the research objectives. Observations were collated and conclusions were drawn from the study. It was found that blockchain provides numerous benefits for taxpayers in easing compliance for transfer-pricing and other tax types. Blockchain may also be used to simplify other business operations including financial reporting. The technology holds numerous benefits for SARS, particularly for use in administering transactional taxes like transfer-pricing. The study revealed that blockchain is suitable for use in transfer-pricing compliance and administration, with the most suitable type of blockchain being a permissioned consortium platform. Consideration needs to be given to the cost of implementing the technology, training of personnel who will use the platform, the development of governance principles and regulation, as well as the roles and responsibilities of all parties on the network.

Keywords: Transfer-pricing; Blockchain; Tax technology; Tax compliance; Tax administration (search for similar items in EconPapers)
Date: 2024
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Persistent link: https://EconPapers.repec.org/RePEc:spr:prbchp:978-3-031-46177-4_20

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DOI: 10.1007/978-3-031-46177-4_20

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