Government plans new package to boost tax revenues

ISTANBUL

The government plans to introduce a bill to parliament later this week, aiming to raise additional 226 billion Turkish Liras ($7 billion), equal to about 0.7 percent of gross domestic product, in tax revenues.

The new tax package foresees increases in taxes on multinational and local companies as well as other taxes.

The government’s medium-term program forecasts a budget deficit of 2.65 trillion liras or 6.4 percent of the estimated GDP in 2024.

In its budget, the government projected that tax revenues would be around 7.4 trillion liras this year.

The bill is expected to be forwarded to parliament after the Eid al-Adha holiday, which ends on June 19. The government aims to pass the package before the assembly enters the summer recess.

The package containing tax regulations aimed at increasing efficiency and justice in taxes and reducing informality will be presented to parliament soon, Finance Minister Mehmet Şimşek wrote on social media platform X on June 13.

In the same post, Şimşek also announced that an earlier plan to introduce a transaction tax on stock trading was postponed.

The proposal calls for one of the biggest overhauls of Türkiye’s tax code since authorities raised levies across the board two decades ago to pay for the damages from the 1999 earthquakes, officials familiar with the matter told Bloomberg.

An additional 40 billion liras in annual income next year is expected from the planned imposition of a minimum 15 percent tax on multinational corporates for profits accrued in the country, said the news service.

The Treasury and Finance Ministry also expects another 90 billion liras annually from a new minimum tax base to be applied to Turkish corporates, according to the draft study.

Real estate investment trusts will be required to pay a minimum corporate tax on profits made from property sales or rentals. The rule would result in an additional revenue of 7.2 billion liras, according to the Treasury’s estimates, said Bloomberg.

The ministry is also considering a 0.03 percent transaction tax on crypto trading. The move is expected to bring in 3.7 billion liras a year, the news service reported, citing official projections.

In the first four months of 2024, the central government budget posted a deficit of 691 billion liras, rising 81 percent from the same period of last year.

Tax revenues surged more than 112 percent year-on-year to 1.8 trillion liras.