Blockchain as the Future of GST/VAT Compliance: Integrating Technology in Tax Compliance: Study from South Asia

2. LITERATURE REVIEW

2.1. Theoretical Framework

This study applies the Technology–Organization–Environment (T-O-E) framework as the theoretical basis, as it directly adheres to the constructs assessed in the study, such as blockchain adoption status, IT infrastructure, transaction volume, and regulatory environment, and elucidates that these dimensions form GST compliance outcomes. T-O-E’s technological environment focuses on the capabilities of systems and perceived usefulness, which justify the view that blockchain adoption is a determinant of efficiency and error reduction. The Technology-Organization-Environment (T-O-E) framework is utilized to describe how technological and institutional circumstances influence the GST compliance results. According to (Dandona et al., 2024), in the technological environment, blockchain implementation minimizes compliance mistakes by automation, instant validation, and unchangeable records maintenance, which restricts human intervention and post-filing corrections.

This saves clerical errors and delays in the reconciliation process, especially in situations where digital systems are effectively integrated (Owens & Hodžić, 2022). However, their effectiveness will be determined by the ease of use and the compatibility of the systems with existing tax systems (Wulandari & Dasman, 2023). In addition, (Abubakar et al., 2024) says that organizational context is the variance in the time of filing and accuracy of filing among companies. The availability of adequate IT system, trained personnel, and workflow alignment can assist in the processing of data more rapidly and submit it in a hassle-free manner. On the other hand, limited digital capability or physical approval lines amplify processing constraints especially when transaction volumes are very high as postulated by (AbuAkel & Ibrahim, 2023). (Taherdoost, 2022), on the other hand, pays significant attention to the fact that the performance outcome of technological innovations is an issue of organizational preparedness, and that technology will not consistently bring efficiency gain. The environment also moderates these relationships. Transparency, reduce interpretive uncertainty and mitigates compliance error, regulators impose work-increasing work, and hierarchy in reporting, and increase cognitive load of reporting thereby enhancing work, as reported by (Olabanji, 2023). The magnification of these moderating effects is greater in heterogenous South Asian tax administrations because enforcement strength, institutional maturity and SME dominance are all different. Consequently, reporting time may increase following large amounts of transactions in which the deficiency in technological and organizational readiness makes the issue, and the reduction of errors is an incidental attribute of regulatory consistency. The study via such causal pathways determines T-O-E as a two-way accountability framework founded on the mechanisms which articulate the association among the circumstances of the institution and the measurable performance in the terms of conformance. The technological capability will reduce the processing errors and delays in filing through automation, system testing and interoperability under the Technology-Organization-Environment framework (Anomah, 2024). Nonetheless, (Sidik, 2022) concludes that high number of transactions in a situation where the organization is not ready may increase the mental burden, complexity of the processes and verification requirements, which further increases the filing duration and error rate. These tensions become particularly acute in heterogeneous South Asian tax regimes, whereby the digital infrastructure, labour capabilities and regulatory focus outcomes are specified. Therefore, performance impacts are not only a consequence of technology adoption but are also influenced by the technology’s compatibility, the organizational environment, and the broader environmental context.

2.2. Hypotheses Development

2.2.1. Hypothesis 1: Blockchain Adoption and GST Compliance

The immutable and traceable nature of blockchain data has been linked to fewer tax compliance errors since its adoption. According to (Ariyibi, 2024), blockchain can decrease the tax gap by 75-80% and compliance costs by 40-50%, demonstrating its high potential to reduce human-related filing errors. Nevertheless, their review-based approach is thorough but not empirically tested, which limits its capacity to attribute the decrease in error rates to the adoption of blockchains. Contrastingly, (Iqbal et al., 2025) provides a qualitative multiple-case study of five digitally advanced nations to offer a deeper contextual understanding of how blockchain can ensure transaction integrity and enhance timely, error-free reporting. Studies based on interviews provide valuable and detailed insights but are limited in their generalisability to larger sample populations. In the context of the T-O-E, the automation and transparency of blockchain technology enhance error-prevention measures, which validates the idea presented by (Adefunke & Mayowa, 2024) that the immutable structure of blockchain eliminates compliance misrepresentation. The technological and environmental aspects of T-O-E show why greater digital capacity and regulatory burdens jointly improve GST compliance in developing areas. These literature arguments lead to the formulation of the first hypothesis of the study, which is:

H1: Blockchain Adoption Status holds a statistically significant and negative relationship with the GST compliance error rate in South Asia.

2.2.2. Hypothesis 2: Blockchain Adoption and Tax Filing Time

The use of blockchain has been associated with reduced tax filing time through automated validation and real-time data synchronization. (Abubakar et al., 2024) emphasizes that tax systems that use blockchain technologies simplify reporting by automating record verification via smart contracts and shortening the filing process for SMEs. Nevertheless, their review design, although rich in concepts, lacks empirical evidence and therefore cannot accurately quantify time savings or draw causal conclusions. (Dagunduro et al., 2025), in turn, are more empirically grounded, having a large-scale survey and multivariate regression of the results that demonstrate that blockchain-based platforms would help increase the efficiency of filing and the entire revenue process by a significant margin. Even though such a practice may cause cross-country bias when using the self-reported data, the existing literature states that blockchain has the potential to streamline administrative processes. Efficiency of technologies and organizational readiness can be attributed to the decline in filing time in the T-O-E framework and the results of (Heinemann & Stiller, 2025; and Sidik, 2022) regarding the possibility of quickening compliance practices through automation and simplification of the workflow. These findings justify the assumption that the implementation of the blockchain will save a lot of time that is needed to submit the filing in new tax regimes. Therefore, based on these literature arguments, the following H2 of the study is formulated:

H2: Blockchain Adoption Status has a statistically significant and negative predictive association with the filing time in South Asia.

2.2.3. Hypotheses 3 and 4: Transaction Volume Error Rate and Filing Time

Recent research by (Kushwah et al., 2021) indicates that transaction volume has a substantial relationship with the rate of compliance errors and the time required for filing. Large volumes of transactions increase the burden of administrative and data-processing requirements, and this is more likely to lead to recording and reporting mistakes unless automated systems have been implemented, (Anomah, 2024). Moreover, (Kabwe & Van Zyl, 2021) observes that filing and positive revenue results are linked with the adoption of digital tax platforms, which are more efficient in managing large flows of transactions, which means that when the volume of transactions is high, it is the mediating roles of digitalization that facilitate a reduction in filing time as well as errors.

According to (Abubakar et al., 2024), increased volume of transactions in itself does not necessarily translate into a decreased number of compliance errors, and until organizations are ready, have technological infrastructure, and enforce it, more transactions can lead to greater inefficiencies. Correspondingly, (Iqbal et al., 2025) notes that the volume of transaction promote the adoption of e-filing by tax authorities, but the cross-sectional design does not allow one to infer causality. Similarly, with regards to the T-O-E viewpoint, the technological environment, including automation and system capacity, interacts with organizational ones, including process maturity and staffing, and the environmental one, including regulatory supervision and enforcement measures, determines the compliance outcomes. This model gives the reason why, in itself, transaction volume may not result in fewer errors in GST or shorter-filing time: without IT infrastructure, willing staff, and facilitating regulations, more volume may saturate systems and cause more error. The combination of the study’s results to H3 and H4 and the need to have region specific, empirical studies in South Asia.

H3: Transaction Volume is statistically significantly and positively related to the GST compliance error rate in South Asia

H4: Transaction Volume is statistically significantly and positively associated with the filing time in South Asia

2.2.4. Hypothesis 5: IT Infrastructure and Compliance Error Rate

IT infrastructure will be important in a digital-first tax regime to determine the accuracy of GST compliance. Technological obstacles that result in an inability to file, as (Kumar & Gokhru, 2025) demonstrate, are system downtime, slow portal, and the absence of digital support, which are also some of the reasons why Indian taxpayers tend to commit errors. Their behavioural analysis indicates that, despite simplified processes and transparency, poor IT backbones negate the benefits. Their sample of 100 taxpayers is, however, small, which limits generalisability and limits the study’s capacity to represent a variation between sectors or different intensities of transactions. (Khati et al., 2025) points out that blockchain-based IT infrastructures are able to optimize and increase compliance accuracy by means of real-time validation, traceability, and smooth data sharing. The fact that they use a secondary research design restricts their ability to validate empirically, however, weakening their confidence in their capacity to measure error reduction attributable to IT improvements. The T-O-E framework, technological dimension system capabilities, reliability, and automation interrelate with organizational preparedness, including staff competence and process integration, to affect the results of GST compliance. Regulatory oversight is another environmental pressure that also conditions the effectiveness of IT infrastructure, as suggested by (Anomah, 2024). Although previous research, including (Othman & Yusuff, 2022), argues that a well-developed IT infrastructure increases the system’s reliability and minimizes errors, these data are based mostly on conceptual or cross-sectional evidence. Different levels of digital maturity and regulatory enforcement in the South Asian context require an empirical study to prove these relationships. This study, therefore, guides and considers the influence of the IT infrastructure on the development of the GST compliance accuracy. Based on arguments merging from the review of studies, the fifth hypothesis of the study is formulated.

H5: IT Infrastructure is statistically significantly and negatively related to the GST compliance error rate in South Asia

2.2.5. Hypothesis 6: IT Infrastructure and Filing Time

IT infrastructure has generally been considered one of the determinants of tax filing efficiency, but its impact is context-dependent. (AbuAkel & Ibrahim, 2023) discovered that strong IT systems that are supported by management and the perceived relative advantages can greatly improve e-filing adoption and help to save time on filing in Jordan. Their analysis, based on the T-O-E framework and Smart PLS, with 315 respondents, provides a convincing argument that the mechanisms operate through trust in the system. Its focus on emerging economies and its survey-based design, however, restrict its generalisability to bigger and more heterogeneous taxpayer groups. Conversely, (Mallick, 2021) indicates that ICT infrastructure in India had a negligible effect on the tax collection, with informal economic activity or high transaction volume having the potential to reduce the effectiveness of ICT in accelerating the speed at which the tax is filed. Although the author’s longitudinal analysis gives a wider macro-level approach, it is incapable of isolating behavioural or organizational causes of adoption. In terms of the T-O-E framework, these results suggest that IT infrastructure can only lower the time spent in filing, when perceived as useful, reliable and easy to use, and it is important to note that complementary organizational and governance support is necessary to convert the increase capacity into an efficiency increment. Grounded on these literature arguments, the following hypotheses of the study H6 are developed;

H6: IT Infrastructure is statistically significantly and negatively associated with filing time in South Asia

2.2.6. Hypothesis 7: Regulatory Environment and Compliance Error Rate

The regulatory frameworks play a critical role in determining the level of compliance with GST and determining the errors, as well as how the taxpayer behaves. (Sureka & Bordoloi, 2024) emphasizes that the blocked input tax credit (ITC) and the complicated provisions in the GST regime of India make the operation of the MSMEs a burden and increase compliance failure. Their mixed-methods methodology, which surveys 400 MSMEs and supplements it with qualitative data, offers detailed insights into industry-specific problems, but the use of self-reported financial impacts may be biased and reduce extrapolability. (Gitema et al., 2025) also investigated the effects of the legislation reforms in turnover tax compliance among small traders in Kenya, and the researchers found that the regulatory clarity and compliance are strongly related. Their survey design, which is explanatory, offers good inferential evidence (β = 0.286, p = 0.000), but it is small in terms of geography and may not be able to explain the bigger institutional differences. Within the frames of the T-O-E framework, the findings of (Gitema et al., 2025) imply that the environment dimension, including legislative transparency, enforcement systems and systemic complexity influence the organizational and technological preparedness and adjusts the error rates. Development of well-structured regulations, the one (AbuAkel & Ibrahim, 2023) promotes in India and Kenya, makes cognitive load and errors in compliance less. Based on these arguments, H7 of the study was formed:

H7: Regulatory Environment is statistically significantly and negatively related to the GST compliance error rate in South Asia

2.2.7. Hypothesis 8: Regulatory Environment and Filing Time

The regulatory climate has a significant effect on efficiency in tax filing, and it predetermines the procedural clarity, the standards of reporting, and institutional support. On the one hand, because the GST provisions are challenging, and the input tax credit is withheld, the time spent in filling compliance with vague regulations is time-demanding in India (Sureka & Bordoloi, 2024). On the contrary, (Gitema et al., 2025) show that effective legislative changes in Kenya improve turnover tax filing delays by a significant margin, which indicates that regulatory simplicity and predictability result in efficiency. In line with this, (Mallick, 2021) concludes that ICT integration and the quality of governance can moderate procedural delays, but their effect is weakened in the case of inconsistent regulatory frameworks. (AbuAkel & Ibrahim, 2023) demonstrates that adoption of e-filing depends on the presence of adequate IT infrastructure and support from the top management, as it is clear that technological and organizational preparedness mitigates the impact of regulatory design to decrease filing time. It is also supported by the T-O-E framework that the model, the environmental aspect, transparent rules and institutional support determine the manner in which organizations use technology to gain effective compliance. Supported by the arguments of these studies, the following hypothesis, H8, of the study is formulated. Further, based on these literature arguments and identified literature gaps, the conceptual framework of this study is proposed in Fig. (1).

H8: Regulatory Environment holds a statistically significant and negative predictive relationship with the filing time in South Asia.