New taxes and increases on the way

In the Medium Term Program (PMP), which was announced yesterday and covers the years 2024-2026, new regulations were indicated that will increase the tax burden of citizens.

Based on PPM estimates, the government predicts that the budget deficit will be TL 1.6 trillion by 2023, TL 2.65 trillion by 2024, TL 1.82 trillion by 2025, and TL 1.82 trillion by 2026 .

The forecast that the increase in public spending will slow down from 2025 is in line with the objectives of reducing the budget deficit.

However, the signal that this gap will be closed through the imposition of new taxes or the increase in tax rates has been revealed with notable increases in tax revenue estimates.

According to MTP estimates, the government predicts that tax revenue will increase by 81.4 percent this year and exceed 4.2 trillion Turkish lira.

While tax revenue is expected to reach 7.4 trillion TL with an increase of 73 in 2024, this figure will reach 9.6 trillion TL with an increase of 28.5 percent in 2025 and 11.4 trillion TL with an increase of 19.3 percent in 2026. rising to .

NEW REAL ESTATE TAX SIGNAL, NEW NEED IN HOUSING

One of the notable points in terms of tax regulations in the OVP is for direct taxes. The corresponding article states that “the proportion of direct taxes will increase in the medium term.”

Regarding this expression Commenting on sozcu.com.tr, faculty member Assoc. Ondokuz Mayıs University Faculty of Law. Dr. Murat West, He said this would mean expanding the scope of the income, corporate, real estate, MTV and high-value homes tax or raising tax rates.

“In this context, experience in buying and selling real estate is required. People will now pay fees in excess of the new amount to be determined, and contractors will pay income or corporate taxes on that amount,” said Assoc. Dr. Batı said: “VAT will be calculated on this new amount, if any. Also, the property tax is being rewritten,” he said.

‘SCT MAY INCREASE ON VEHICLES 2000 CC AND UP’

One of the OVP articles on tax regulations is related to the carbon tax.

The corresponding article states that the taxes that have the characteristics of the carbon tax will be reviewed and the economic effects of the complementary carbon tax will be analyzed.

Association. Dr. Batı stated that he evaluated this article as a new SCT increase for luxury vehicles of 2000 CC and above, and said:

“Within the scope of such taxes, I think the SCT and MTV of gasoline and diesel vehicles could be increased, and low rate tax regulations could be introduced for electric vehicles.”

THE TAX BASE WILL BE EXPANDED: TO KKM, CRYPTO ASSETS AND DIAMONDS…

Another article on tax regulations in the OVP deals with ‘widening the tax base’…

In this context, it is mentioned that the tax base will be expanded in order to increase healthy sources of income in the management of public finances.

Association. Dr. Based on this article, the West points to the possibility that products that were not taxed before are now included in the tax scope.

Stating that revenue from currency protected deposits (KKM) and income taxes from crypto assets will be given as an example, Batı also emphasized that SCT’s taking of precious metals such as diamonds and gold can be assessed within this scope. .

WILL THE EARLY 80’S TAX COME BACK?

Batı also stated that there are signs that the “standard of living principle” will be restored in the field of income tax applied in 1982-1998.

The standard of living principle is an application to which some occupational groups must pay income tax in cases where they earn low income. For example, even if a doctor, financial adviser or lawyer suffers losses this year, he will still have to pay income tax in the amount determined based on the standard of living.

DESPITE THE ADDITIONAL BUDGET! DEFICIT / NATIONAL INCOME RATIO 6.4%

Speaking to Sozcu.com.tr, Professor of Finance Department of Istanbul University Faculty of Economics, Prof. Dr. Binhan Elif Yilmaz On the other hand, it draws attention to the fact that even if an additional budget of 25 percent of the current budget is established this year, there will still be a large budget deficit.

“This deterioration of financial discipline is expected to continue in 2024,” Prof. Dr. Yılmaz said, “As it will be in 2024 and 2023, the goal is to reduce the ratio of budget deficit to national income to 3.4 percent only in 2025, after the ratio of 6.4 percent.

Yılmaz said: “Although the additional budget will reach a size of TL 5.6 trillion in 2023, the level of spending will be TL 6.6 trillion,” Yılmaz said, “As a result of the nominal increase in budget expenditures due to the high inflation, both the goods and services of the budget, current transfers and the highest budget. Staff costs, which are a significant burden, will continue to rise.

‘THE INTEREST BURDEN ON THE TREASURY WILL INCREASE’

“The scheduled budget expenditure for 2024 is 11.1 trillion Turkish Lira and this figure means that the 2023 budget expenditure, which grew with the additional budget, will increase by 70%,” said Prof. Dr. Yilmaz continued:

“However, the rate of increase in budget expenditures decreases to 15 percent in 2025 and 2026 compared to the previous year. In 2024, the budget will continue with its spending structure and the effect of local elections will manifest itself in this structure. However, in 2025 and 2026 we will witness the tightening of fiscal policy.

Although the share of debt interest expenses in budget expenditures will be 9 percent in 2023, the Treasury’s interest burden will increase due to the rapidly increasing stock of domestic debt and the upward effect of tight monetary policy. on GDDS interest rates. and debt interest expenses will gradually increase in the coming years and will increase to 9% of budget expenditures in 2026. It will be until the 15th”.