Convergence.Tech, working with the Australian Federal Government has led a consortium to deliver a world-first Australian blockchain pilot that stands to radically overhaul a 100 year-old tax system and has the potential to recover at least $45m annually in lost tax revenue, based on KPMG analysis. Convergence.Tech’s revolutionary platform also enables a Global and Domestic Trusted Distiller Program to be introduced that could lead to privileged trading benefits and a significant reduction in the excise tax administrative burden.
Costing the Federal Government an estimated $582m annually in lost excise revenue, the industry agreed that significant change was required. Burdened with administrative oversight, cashflow impediments and fighting a market burdened with illicit activity, local producers were also wanting to be released from the current tax and production constraints.
Chami Akmeemana, Convergence.Tech CEO said “Trust is a revolutionary force. Where trust exists you can improve systems for everyone, whether they be a start-up, a global business or a regulator. All of it ultimately benefits the national economy. This pilot shows how to do it and why to do it, the benefits are substantial, as is the applicability into other complex ecosystems and supply chains.”
Working with local producers within the Australian Distillers Association and Spirits and Cocktails Australia, Convergence.Tech created a ground-breaking real-time tracking system of spirit movement and tax obligation. The solution provides full production and distribution transparency, driving significant gains in trust amongst all parties. This solution will liberate local producers from the at times burdensome nature of tax administration and with potential implementation of the Global and Domestic Trusted Distiller Program, could streamline the business processes of the entire spirits industry.
“Australian Craft distillers will benefit from their brands having greater protection from illicit competition through the scaled uptake of the blockchain. Australian spirit producers will embrace the technology because it will make their obligations easier and unlocks opportunity for even more significant improvements.” said Australian Distillers Association CEO Paul McLeay.
Another significant benefit of the platform will open up a new commodities marketplace, changing the tax and compliance systems from simply being a recording system, to a potential revenue and capital generating partnership for both government and local producers. Something that could never have been achieved without this world-first use of blockchain technology.
ANZ’s Australian dollar stablecoin (A$DC) was used in the pilot, demonstrating the ability for the movement of the commodity to trigger the settlement and scheduling of excise obligations between distillers and the government.
ANZ Banking Services Lead Nigel Dobson said “ANZ’s A$DC stablecoin offers a safe and secure way to transact in the digital economy. The pilot offers an encouraging step towards more process automation, with real-time and cost saving benefits to those involved”.
