The Problems of the Effective Allocation and Prevention of Risks in the Public Administration System: BlockChain Technology in the Tax Administration

About the authors:

Viktor E. Sevryugin, Dr. Sci. (Jur.), Professor, Acting Head of the Department of Administrative and Financial Law, Institute of State and Law, University of Tyumen; v.e.sevryugin@utmn.ru

Maria A. Novoselova, Senior Lecturer of the Department of Administrative and Financial Law, Institute of State and Law, University of Tyumen; m.a.novoselova@utmn.ru

Abstract:

Contemporary economic entities employ tax-avoidance schemes (including short-term businesses and proxies) in order to maximize their economic benefits in the current financial and economic environment. As a result, the current tax legal relations system produces the risks of harm to public and private interests.

This article studies the problem of rationalizing and adapting the risk allocation system to the contemporary financial and economic circumstances. The risks should be distributed between different stages of companies’ life cycle. The search this problem’s solutions gains more relevance because of the need for public management system’s progressive reformation in one of the most important spheres of the public management system — a tax legal relations subsystem.

This research relies on legalistic and statistical methods, as well as analytical and modelling approaches.

The results show how to improve the implementation of the risk-oriented model used by the tax services in controlling and overseeing activities. In addition, the authors provide an algorithm for implementing BlockChain technology for tax administrating purposes. A platform based on the BlockChain technology would provide the tax services and other designated authorities with technologies for a more effective preliminary, current, and further control.

References:

1. RF Civil Code of 30 November 1994 No 51-FZ (as of 3 August 2018). In: Sobranie zakonodatel’stva RF, no 32, art. 3301.
2. RF Federal Act of 8 August 2001, no 129-FZ (as of 1 October 2018) “O gosudarstvennoy registratsii yuridicheskikh lits i individual’nykh predprinimateley” [On State Registration of Corporations and Individual Concerns]. In: Sobranie zakonodatel’stva RF, no 33, art. 3431.
3. RF Federal Tax Service Order of 11 February 2016 No MMB-7-14/72@ “Ob utverzhdenii osnovaniy, usloviy i sposobov provedeniya, ukazannykh v punkte 4.2 stat’i 9 Federal’nogo zakona ‘O gosudarstvennoy registratsii yuridicheskikh lits i individual’nykh predprinimateley’” [On Approval Conditions and the Measurement Method, Specified in Article 9, Paragraph 4.2 of Federal Act On State Registration of Corporations and Individual Concerns].
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5. FNS planiruet otmenit’ deklaracii” [FTS Plans to Repeal Tax Declaration]. https://iz.ru/news/636682