‘Are you ready for taxes as a ball of light?’
As Turkey’s main agenda was the presidential elections, which went to the second round, the economic downturn accelerated. In addition to the growing budget deficit, the shortage of foreign exchange also increases uncertainty in the market. Pointing out the deterioration of fiscal discipline, fiscal expert Dr. Ozan Bingöl made assessments of the economic policies that will be implemented after May 28.
ozan bingol
THERE WILL BE ADDITIONAL COSTS
“Are you ready for taxes and a sour recipe like a light ball?” Bingöl said, noting that fiscal discipline in public finances has come to an end in the last period, and that the rope has run its course with electoral economics. Emphasizing that there will be new taxes and additional costs to face when receiving public services in June and July after the elections, with the effect of electoral economics, Bingöl explained some of the new burdens in the 2023 budget:
“Many expense items that were not included in the 2023 Central Government Budget were added to the budget expense table. EYT, hiring of contracted staff, increase in staff more than projected during budget preparation, increase in retirement vacation bonus, lower pension, earthquake expenses, added burden to budget like 40 billion in natural gas, and many other electoral expenses that we see and cannot see. Expressing that additional taxes will come in many areas, Bingöl said: “According to the realizations of the first four months of 2023, the budget deficit has reached 2.75 times that of 2022. In the first four months of the year, 58 was consumed. % of the budget deficit of 629 thousand 420 million TL foreseen for the whole year. Given the new spending items that will be added due to the electoral economy, a budget deficit is likely to emerge by the end of the year, well above the budget target.
Budgets are only sufficient for a period of six months.
Saying that the budget deficit figure for the January-April 2023 period increased by 1.876 percent compared to the same period of the previous year, Ozan Bingöl noted that budget expenditures increased by 83.9 percent and revenues increased by 38.6 percent compared to the first four months of the previous year. Bingöl said: “If the 4-month budget deficit continues at the same rate or increases, it will be inevitable to make an additional budget equivalent to a new budget, as it was last year. As a result of the unpredictable management of the economy or the departure from fiscal discipline with spending carried out without depending on the budget, the budgets are now only enough for a period of six months”.
Increase in indirect taxes
Noting that the dose of the bitter recipe could be kept a bit low due to the local elections a year from now, Ozan Bingöl said: “In this context, with the increase in the volume of money until the local elections, it may be possible to take money out of our pockets through the inflation tax. But then it is inevitable to face the most painful of prescriptions. It is possible that the new tax items that the financial administration will apply are in the field of indirect taxes, which already undermines tax justice. For this reason, the part of the new taxes, which is financially anesthetic and does not create the psychology of paying taxes in citizens, is now more attractive.
Here are the taxes that await the citizens
Tax specialist Dr. Ozan Bingöl said that after the elections, the bitter recipe will be cut to the public. Bingöl summarized the possible tax increases as follows:
√ Increase in the rates of the Special Communications Tax.
√ Tax increase in articles of the SCT on alcohol.
√ Increase in the rates of the SCT on vehicles.
√ Significantly increase the amount of fees for telephones brought from abroad.
√ Increased many mortar items.
√ Increase in the rates of the Tax on Documented Legal Acts and fixed amounts.
√ Some rate increases or BSMV coverage.
√ One-Time Additional Tax on Motor Vehicles.
√ Additional Real Estate Tax for a single time.
√ Tax on the economic balance.
√ One-time implementation of the net asset tax and other similar taxes.
√ More intensive application of traffic fines.
√ Increase tax audits and tax inspections (especially for those that do not increase the tax base/taxes)
√ Increase the rate of Corporate Tax by a few points.