Please describe your proposed solution.

<u>Problem:</u>

Invoices are crucial documents for businesses. For a tax agency to accept invoices, allowing businesses to deduct expenses and calculate taxes, it is essential to validate the accuracy of relevant information on the invoice, such as the buyer, seller, issuance date, electronic signature date, and the status of the digital certificate.

In Vietnam, invoices have been digitized, creating opportunities for the development of invoice data processing tools to provide tax risk alerts and automatically integrate data into business management systems. In line with this trend, we have developed VitaxOne, a "Automatic - Intelligent - Secure" invoice data processing tool.

However, current off-chain tools are not widely trusted due to a lack of transparency in processing, exploitation, and the risk of leaking business information. This presents a significant barrier to convincing the user community, despite the evident need for such a tool.

<u>Solution:</u>

To gain trust, we integrate invoice data processing applications into general business management systems and specifically VitaxOne, currently developing off-chain, onto the blockchain platform. Therefore, for VitaxOne, we have chosen to implement the Cardano blockchain platform along with a system redesign for optimization. With this choice, we believe that VitaxOne's application will increasingly convince customers to register and use it. Additionally, the success of VitaxOne, as a rare blockchain-based business management information processing application, will contribute to expanding the ecosystem and promoting the Cardano blockchain platform to the Vietnamese business community.

VitaxOne is designed to process two application components: the Client and the Server, as follows:

• The Client App connects to the blockchain environment, running on the client machine, with processing techniques and user functions as follows:
• Customers declare invoice data sources and identify sensitive data components to be concealed on the invoice.
• Customers view management reports to monitor the Client App's invoice information processing.
• Encrypt necessary information components (ensuring no sensitive information is leaked about the business on the invoice). The Client App uses the AES (Advanced Encryption Standard) algorithm to encrypt general information such as: seller, buyer, invoice number, date of issuance, date of release, invoice signing certificate…, using Homomorphic encryption algorithm to encrypt other sensitive information such as: item names, services, unit prices, total amounts, amounts… After that, this encrypted data is placed in the blockchain environment, and the processing request is sent to the Server App's queue (Kafka TopicIn).
• Access the Server App's result queue (Kafka TopicOut), retrieve the decrypted data result to display complete information for customers.
• Customers access the Client App using User/Password/Captcha. The Client App is developed as a Webapp (Net.Core C#), Kafka client.
• The Server App connects to the blockchain environment, running on the server, with processing techniques and functions as follows:
• Connect to the Government information gateway to collect "Legal Risk data sources of businesses." This "Legal Risk data of businesses" is encrypted and securely stored on the Cardano blockchain environment, serving as the basis for confirming the risk level of the invoice.
• Access the processing requests of the Client App in the queue (Kafka TopicIn), retrieve relevant data combined with the "Legal Risk data of businesses" to perform authentication processing, create risk alert reports, integrate management operations, encrypt and send data information to the blockchain environment, provide feedback on the processed results to the queue (Kafka TopicOut) waiting for the Client App to retrieve and display for customers.
• To meet the large processing demand, the Server App is designed as a Microservices system, automatically scaling based on the number of incoming requests to ensure stable operation under a large load. Developed using Net.Core C#, PostgreSQL database, Apache Kafka server.

Please define the positive impact your project will have on the wider Cardano community.

<u>Commitment to serve the Community:</u>

VitaxOne will be a robust platform for integrating, aggregating, and automatically processing invoice data. It will provide real-time tax risk alerts, ensuring that crucial processes in business management have accurate and timely data.

<https://www.youtube.com/watch?v=gmO7VcP2l6o>VitaxOne will share its invoice risk alert application platform for free with the community. We commit to delivering value in terms of convenience, information security, secure transactions, timely response to tax fluctuations and risks, allowing businesses to focus on business development rather than manually monitoring invoice data and its risks.

<u>Impact:</u>

In Vietnam, since the end of 2021, the National Assembly passed a Resolution on the Economic Restructuring Plan for the 2021-2025 period. The main goals by 2025 include increasing the contribution of science, technology, and innovation to growth, with total factor productivity (TFP) reaching about 45% of GDP. There is an aim to narrow the gap in competitiveness with ASEAN-4 countries, especially in terms of institutional indices, infrastructure, and human resources. The target is to have around 1.5 million businesses, including approximately 60,000-70,000 medium and large-scale enterprises; the private economic sector contributing about 55% to GDP; the development of 5-10 nationally branded products with international recognition; the digital economy accounting for 20% of GDP; and the digital economy's share in each industry reaching a minimum of 10%. There is also an effort to establish about 35,000 cooperatives by the end of 2025, with over 3,000 applying high technology in the production and consumption of agricultural products, and about 35% of agricultural cooperatives linked with businesses in the value chain.

To achieve these goals, the government has introduced several business development programs with crucial support initiatives, notably the digital transformation plan for businesses, encouraging them to apply advanced technology and innovation. Invoice data processing applications help businesses feel confident in transactions, business cooperation, and tax safety, representing a potentially thriving trend.

Business data processing applications applying Blockchain technology, in general, and on the Cardano ecosystem in particular, are scarce. VitaxOne is one such tool in this category. Together with Cardano, VitaxOne is certain to bring a difference compared to existing tools in the market (off-chain) that rely on exclusive service providers and are challenging to prove transparency. VitaxOne grants ownership and data security to customers along with an excellent user experience and simplicity, contributing to promoting the Cardano ecosystem within the Vietnamese business community.

https://www.youtube.com/watch?v=3Xaf9Ycd5VY&t=3sVitaxOne has opened its API for other Cardano projects to build dApps sharing secure information on Cardano. Our API set is open and easy to connect to, exploiting legal risk business data, allowing integrated dApps into various software products, thereby bridging with Cardano for registration, sharing, and data tracking.

View VitaxOne API documentation: VitaxOne API Reference

What is your capability to deliver your project with high levels of trust and accountability? How do you intend to validate if your approach is feasible?

We are a legally connected technology company with the government's information system, providing solutions for electronic invoices and accessing the database of businesses with legal risks, which is the information foundation for tax risk alerts for relevant data entities in the invoice.

Our VitaxOne system, currently in the OffChain environment, has over 1,000 users. The level of customer interest in exploring our application is quite significant, averaging 5 requests per day. I believe that demonstrating a transparent solution that does not misuse sensitive business information will significantly increase the acceptance of our services by customers.

In terms of human resources, we have a team of experienced professionals (with at least 10 years of experience) in invoices and tax reporting, with expertise in auditing, accounting, tax, and legal matters for businesses in Vietnam. Additionally, our programming experts have many years of experience in developing enterprise resource planning (ERP) software systems, business data processing systems, banking systems, as well as auditing accounting systems.

What are the key milestones you need to achieve in order to complete your project successfully?

Detailed Plan for Architecture and Technical Feasibility Study, Technology. (01 month)

<u>Description:</u>

Define the technical architecture of the VitaxOne platform, including integration with the Cardano blockchain for both the Client App and Server App.

<u>Outputs:</u>

Documentation for business process analysis, detailed system architecture documentation, and a feasibility report for the Client App & Server App subsystems of the system.

<u>Acceptance Criteria:</u>

The documentation is reviewed and approved by the technical advisory board, demonstrating how the system will be built on Cardano and confirming the technical feasibility.

>Development of Client App, Running on Client Devices (1.5 months)

<u>Description:</u>

Develop the Client Application suite to handle invoice data (XML files) provided by customers. The app should encrypt the data, place it in the blockchain environment, and submit processing requests to the Server App's queue (Kafka TopicIn). It should also access the result queue (Kafka TopicOut) of the Server App, wait to retrieve the decrypted data result, and display complete information for customers.

<u>Outputs:</u>

Code and documentation for the deployable Client App.

<u>Acceptance Criteria:</u>

The code has been tested for security and functionality according to the design. Additionally, successful deployment on a test network with documentation verified by the development team.

>Development of Server App, Running on Server (1.5 months)

<u>Description:</u>

Develop the Server Application suite to meet high processing demand. Connect to the government information gateway to collect "Legal Risk data sources of businesses," encrypt, and securely store them on the Cardano blockchain environment. Access the queue (Kafka TopicIn) to receive processing requests from the Client App, retrieve relevant data to perform authentication processing, create risk alert reports, integrate management operations, encrypt, and send data information to the blockchain environment. Provide feedback on the processed results to the queue (Kafka TopicOut) waiting for the Client App to retrieve and display for customers.

<u>Outputs:</u>

Code and documentation for the deployable Server App.

<u>Acceptance Criteria:</u>

The code has been tested for security and functionality according to the design. Additionally, successful deployment on a test network with documentation verified by the development team.

>Security Testing and Compliance Verification (2 months)

<u>Description:</u>

Conduct comprehensive security testing to ensure compliance with the relevant standards outlined in the system design documentation.

<u>Outputs:</u>

Security testing report and documentation of compliance with business process handling.

<u>Acceptance Criteria:</u>

No significant issues found during the security testing process, and confirmation of compliance with standards, business processes of enterprises, and regulations of the Cardano blockchain.

Who is in the project team and what are their roles?

• <u>Mr. Vo Minh Tuan:</u>
• Expertise: Business operations, Financial Management, Project Financial Manager, and System-wide User Testing.
• Experience: Over 20 years in US/JP listed & Multinational Companies, with deep knowledge of Finance, Accounting, IFRS, US-GAAP, SOX, Tax, Customs, Labor, Investment, and Business Law.
• LinkedIn
• <u>Mr. Thien Tran:</u>
• Role: Project Director, Business Process Design Analyst, and System-wide User Tester.
• Expertise: Software Development, Database Warehousing, ERP, E-invoice solutions, and Business Management Software solutions.
• LinkedIn
• <u>Mr. Minh Nguyen:</u>
• Role: System Microservices Design and Programming.
• Expertise: Software Development & Design, Programming, Creative Problem Solving, Servlets, SOAP, Microservices, CI/CD, Apache Kafka, Agile Development, Spring Framework, RESTful WebServices, MySQL.
• LinkedIn
• GitHub
• <u>Mr. Dinh Duong Ha:</u>
• Role: System Security Design and Programming.
• Expertise: Software Design, Microservices, C#, C++, Qt, Go, Rust, Embedded Linux Programming, Blockchain, Crypto expert, Smart Contracts, REST, PostgreSQL.
• GitHub
• <u>Mr. Truong Hoai Quoc:</u>
• Role: System Processing Design, UI Design, and User Application Programming.
• Expertise: Project Management, Software Development, C#, SQL, PHP, Electronic Invoice, Business Management Software solutions.
• LinkedIn
• GitHub

Please provide a cost breakdown of the proposed work and resources.

• <u>Project Manager, Business Process Design Analyst, and System-wide User Tester:</u>
• Duration: 6 months
• Monthly Rate: $1,500 per person
• Total: $9,000
• <u>Business Consultant, Accounting and Financial Management, and Project User Tester:</u>
• Duration: 6 months
• Monthly Rate: $1,500 per person
• Total: $9,000

System Design and Programming Team (Microservices, Security, and User Application):

• <u>System Processing Design, Interface Design, and Programming:</u>
• Duration: 5 months
• Monthly Rate: $2,000 per person
• Total: $30,000
• <u>Additional Service Costs for 6 months:</u>
• Virtual Server Rental (04 vCPU, RAM: 10GB, Storage NVMe: 80GB): $50 per month
• Electricity, Water, Internet: $50 per month
• Total: $600

Total Budget in USD: $38,600

Total Budget in ADA: 96,500 ADA (rate 1 ADA = 0.4$)

How does the cost of the project represent value for money for the Cardano ecosystem?

Statistics until October 2023 indicate that 100% of businesses and organizations (851,372 units) and 100% of households and individual businesses (65,576 households and individual businesses) in the entire country have transitioned to using electronic invoices, as per Decree No. 123/2020/NĐ-CP (source: <https://thoibaotaichinhvietnam.vn/100-doanh-nghiep-to-chuc-ho-kinh-doanh-da-su-dung-hoa-don-dien-tu-137045.html>).

The General Department of Taxation states that, starting from July 1, 2022, the nationwide implementation of electronic invoices has resulted in an average of over 10 million invoices issued per day, a 40% increase compared to the average daily volume in June 2022. On some days, the number has reached over 26 million invoices (on July 18, 2022) (source: https://mof.gov.vn/webcenter/portal/thtk/pages_r/l/chi-tiet-tin-tin-hoc-va-thong-ke?dDocName=MOFUCM241333).

Assuming each manual invoice processing takes 1 minute and 5% of taxpayers use this solution, the total time saved would be 10 million x 5% = 500,000 minutes.

This corresponds to 500,000 minutes / 60 minutes / 8 hours = 1,041 working days.

At a rate of $20 USD per working day, this would amount to $20,820 USD per day.

Therefore, if 5% of taxpayers use this solution, the Cardano VN community would have approximately 42,568 users (5% of 851,372).