If you had some blank-slate society upon with the impose this, it might be able to work (or it might descend into an arms race of who can subvert the definition of 'lie' the most)
If it were to suddenly magically be foist upon our society? Either it wouldn't alter the ability for people to warp the truth and therefore accomplish nothing, or we're apocalypse-level screwed: It would take about a day for nearly every single relationship (familial, romantic, and professional) to completely implode as being confronted undeniably that your significant others lied to you, even for the best of reasons, is going to destroy your ability to trust any of them again (Even if you know intellectually they can't lie that's not going to salve over the anger felt from the perceived insult so easily).
This would also happen in a macro-scale; the progress of legislation would likely slam to a halt when each representative is now coerced to state what lobby purchased their vote. From there I don't know what would happen next, but there will definitely be a lot of fighting and grabbing for power.
In other words, magically having it imposing it on us would have the same effect as if a net had all its connections spontaneously combustion.