National Tax Agency Launches Comprehensive Digital Invoice System to Combat Tax Evasion

The National Tax Agency implemented a nationwide digital invoice system (Invoice System) requiring all businesses to issue and maintain electronic records of transactions. The system, mandatory for companies with annual revenues exceeding 10 million yen, creates a comprehensive digital trail for all commercial transactions. Real-time data transmission to tax authorities enables automated cross-referencing and anomaly detection, significantly enhancing tax compliance monitoring. The system incorporates blockchain technology to ensure invoice authenticity and prevent tampering. Small businesses receive subsidized access to certified invoice software and technical support through regional tax offices. The agency projects additional tax revenue of 450 billion yen annually through improved compliance and reduced evasion. Implementation includes AI-powered analysis tools that identify suspicious transaction patterns and potential tax avoidance schemes. Businesses must retain digital records for 10 years with standardized formatting enabling seamless audits. The system integrates with existing corporate accounting software through mandatory APIs. Privacy protections ensure business confidential information remains secure while enabling necessary tax oversight. This digitalization represents Japan's most significant tax administration reform in decades.