Abstract : When users purchase some items using mini programs, within half a minute after they confirm their payments and apply for e-invoices online, e-invoices powered by the blockchain technology will be deposited into their weChat wallets. In less than four months, blockchain powered e-invoicing has achieved large scale adoption now that it has opened up the “weChat payment”channel.
When shoppers enter the Walmart store on Jinhai street in Bao An district in Shenzhen, they are able to purchase items using mini programs while browsing around. Payment settlement is fast. After they confirm their payments and apply for e-invoices online, it takes less than half an minute for the headers and the tax numbers of the invoices to be identified and e-invoices supported by the blockchain technology to be deposited into their weChat wallets.
This was the onsite experience of ChainDD in Shenzhen. An invoice with a hash value is still quite a novelty. Shopping by scanning QR codes and automatic payments have been popularized in supermarkets across the nation. However, in terms of the implementation of blockchain technologies, Shenzhen has made rapid progress in a short period of time. A Walmart employee told ChainDD that all consumers are able to have e-invoices issued in their stores.
Before blockchain e-invoices entered Walmart stores, it had been trialed in the revolving restaurant and some branches of China Merchants Bank in Shenzhen. In mid December, Shenzhen Tax Services of the State Administration of Taxation and Tecent joined forces and succeeded in connecting the blockchain powered invoicing system and the weChat payment platform. After that, consumers have been able to apply for blockchain powered invoices directly after making payments through weChat Pay. The scale of adoption of blockchain invoicing is growing rapidly and the blockchain technology is fast permeating every part of people's life.
Real changes to blockchain powered e-invoices
Serious effort in Shenzhen to develop blockchain invoices started in the early half of 2018. On May 24, 2018, Shenzhen Tax Bureau, together with Tecent, established an “Intelligent Tax”innovation lab, starting to trial the “technological innovation+”tax management plan, for which blockchain is one of the important areas.
On July 2, the State Administration of Taxation issued an official approval, authorizing Shenzhen to be the pilot city to trial blockchain e-invoices, the first in the nation. Against this backdrop, Shenzhen's blockchain e-invoices have become the first successful implementation of the lab's research, and also a key project of the “Intelligent Tax”lab.
ChainDD has discovered that the primary difference between blockchain powered e-invoices and ordinary VAT invoices lies in their password counterfeiting features. Traditional VAT invoices use the 84-digit tax control passwords while blockchain e-invoices use unique hash values.
Hash values are a encryption method of the blockchain technology, with the advantages of distributed storage, traceability and tamper-resistance. Also because of these characteristics, the authenticity of the characters identified and encrypted using hash values is guaranteed. By combining “cash flow and invoice flow” , blockchain powered e-invoices achieve the integration of invoice issuance and online payments, realizing “matching transaction data and invoice data”.
Furthermore, a blockchain powered e-invoice is not a VAT electronic ordinary invoice but an ordinary invoice. A tax worker told ChainDD that its nature is same to the traditional VAT invoice. Blockchain e-invoices cannot be used for deduction of input VAT. “Input tax”in the payment amount is counted in the cost of goods and cannot offset output VAT generated from the enterprise' business including sales.
The tax worker added that the blockchain technology has brought completely new encryption methods. The fact that“a transaction is always coupled with invoice issuance”guarantees the verity of the transaction and thus avoids the chaos caused by “counterfeiting invoices”to a large degree. Additionally, e-invoices supported by the blockchain technology connect all parties involved in the issuance of the invoices and will save large human and resource costs in all stages of accounting including reconciliation.
In the internet era, both the offline transaction and online invoice issuance channels have been opened up. However, consumers still need to keep paper invoices for audit. Blockchain has helped consumers, businesses, companies and tax bureaus achieve full-platform connection. Hash value encryption guarantees the reliability and authenticity of the shared ledger data by multiple parties while bringing new user experiences. Paper invoices which are both inconvenient and less efficient will be pushed out of the historical stage by the blockchain technology.
Blockchain targets client-side users on a large scale
Shenzhen Tax Bureau launched its invoice service on the weChat payment platform on December 11, signaling that all businesses enabling weChat Pay in Shenzhen are now able to log on their weChat Pay merchant platforms to directly activate the e-invoicing function powered by blockchain. It took less than four months for Shenzhen Tax Bureau to comprehensively implement the service from its trial.
Connecting its service to weChat Pay is of great significance. Previously, people questioned whether the blockchain technology can be adopted in a large scale and whether client-side users can enjoy the benefits brought by the blockchain technology. Now these doubts have been dispelled one by one.
The trial of blockchain powered e-invoices can be used as a template for the national tax system to study. The weChat Invoice Assistant believes that the “blockchain powered e-invoicing function of weChat Pay” has five advantages:
1. Zero adoption stress.
Merchants do not need to install extra systems and can adopt the service as long as they have enabled weChat payment function.
2. Zero issuance stress.
Merchants do not need special equipment and will be able to issue blockchain powered e-invoices as long as they operate online.
3. E-invoices can be issued for all consumption.
From the consumers' perspective, making payments by scanning QR codes is an established habit and now invoice issuance can be equally convenient.
4. The weChat platform has a strong function extensibility.
“Scanning QR codes”can be used to verify the authenticity of the e-invoices issued quickly and “My invoice header”can be used to issue invoices quickly. Storing e-invoices in the weChat wallet enables the user to collect all the invoices. Interfaced with the reimbursement system, the invoice system can be used for reimbursement upstream.
5. High duplicability.
The national tax system can quickly duplicate the channel of invoice issuance of“weChat invoice”and weChat merchants nationally are able to connect to the “blockchain e-invoice”system.
In restaurants, supermarkets and banks, through business-side upstream linkage, in the form of consortium blockchain, blockchain e-invoicing provides services for a great many client-side users and is certainly a valuable attempt.