Global big four auditing entity Ernst & Young (EY) has reportedly taken additional strides in harnessing blockchain potential, via a new project aimed at enhancing taxation processes. 

Specifically, EY reportedly disclosed details regarding the completion of a blockchain-powered initiative, primarily designed to tackle complexities and inefficiencies in the cross-border withholding tax (WHT) process, overall a paper-dependent protocol, in which information could be missing or not appropriately shared, because of privacy-related reasons. 

“It also may not be trusted by counterparties and tax authorities who require more and more information to validate that the correct amount of withholding tax has been paid either by relief at source or after a withholding reclaim,” EY reportedly remarked. 

The new WHT solution will reportedly carry out the implementation of EY-developed blockchain-powered tech, to establish a proper sharing process with enhanced security, automation and decentralization for data, between tax agencies and associated intermediaries, to streamline tax compliance and bring down fraud.

The initiative reportedly witnessed the participation of numerous tax agencies throughout the globe, nominally the UK’s tax collection agency HM Revenue & Customs, the Netherlands Tax Administration as well as associated Norway-based agencies, JPMorgan, Northern Trust and Citibank.

As included in the scope of the initiative, EY professionals, together with state and industry representatives, have reportedly conducted testings for the TaxGrid blockchain solution – a multi-party blockchain infrastructure linking financial intermediaries to share tax and finance data. 

The solution reportedly achieves tokenization of investment entitlements via smart contracts deployment, together with taking care of their distribution across blockchain wallets owned by different financial establishments.