This article explores the transformative role of blockchain technology in government operations and tax compliance systems. It provides an analysis of decentralization, smart contracts, and immutable ledgers, and discusses how these innovations enhance transparency, security, and efficiency within public sector governance. The content covers funding challenges, integration with legacy systems, public-private partnerships, and regulatory frameworks, offering insights into both technical and financial aspects. It also highlights emerging trends such as AI integration and decentralized finance models that promise to drive the future of digital governance and automated tax systems.