Improving Security Of The Tax Collection Process Using The Blockchain Technology

Articles in Press

Document Type : Original Article

Authors

1 Iran, Tehran, Malek Ashtar University of Technology, Faculty Electronic and Computer

2 Faculty of Electronic and Computer Engineering, Malek Ashtar University of Technology, Tehran, Iran

Abstract

The security of a tax system is directly linked to the development of a country. Traditional processes of tax calculation and collection have vulnerabilities that allow criminals to breach centralized financial systems, commit identity theft, and misuse personal information. These flaws also lead to tax evasion and fraud by enabling unauthorized alterations to financial records and documents, often in collusion with dishonest employees. Blockchain technology, as a distributed database, offers decentralization, transparency, immutability, and trustless operations, paving the way for advanced levels of transparency, security, and reporting. It significantly impacts how taxes are recorded and helps combat fraud and tax-related violations. This capability is achieved through smart contracts, which can automate processes such as payments, asset transfers, and data recording, thereby making tax calculations more efficient and reducing time and costs. In this study, for the first time, a locally designed and developed tax management system based on blockchain technology has been implemented to enable invoice management. This system minimizes tampering with audit records and prevents the issuance of fake invoices and fraudulent billing, leading to a substantial reduction in tax evasion. The proposed system digitizes invoices and automatically calculates taxes using Ethereum blockchain smart contracts. As a result, it reduces the risk of cyberattacks that may lead to data loss or forgery and enhances trust in tax payment execution by eliminating the influence of third parties.

Keywords

Tabriz Journal of Electrical Engineering

Articles in Press, Corrected Proof
Available Online from 24 December 2025

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