28.6 C
New York kenti
Cumartesi, Temmuz 13, 2024

Tax Reform Package Finalized, Set For Parliament Approval

Mutlaka Oku

By Janet Ekstract ISTANBUL – A new tax reform package for Turkiye will be submitted to the Turkish parliament in the next few weeks. The package is part of a more concerted effort to enhance and develop Turkiye’s fiscal discipline, guaranteeing a more equitable tax system. The Turkish government previously announced major spending cuts as it moves forward with much stricter monetary policies. The new legislation would see a tax on capital and moves to boost the share of direct taxes, Turkish officials have said. A primary focus of the new package will require multinational companies with annual consolidated revenue exceeding 750 million euros, to pay a corporate tax rate of at least 15%. This aligns with similar legislation in other countries like the U.S. and several European nations. Its goal is to address concerns about tax avoidance by large corporations.

A new Bloomberg report indicates Turkiye’s new tax package is one of the largest tax overhauls in the last 20 years with its initiatives expected to bring an additional $7 billion in revenue. As Treasury and Finance Minister Mehmet Simsek wrote on X, June 20: “We will strengthen tax justice with regulations aimed at increasing the share of direct taxes included in the package expected to be discussed in our Grand (National) Assembly soon.” The new tax package includes a requirement to pay minimum corporate and income taxes. Meanwhile, Vice President Cevdet Yilmaz said the government’s main focus is to “increase tax justice without creating inflationary side effects, to consider income distribution and to protect investment, employment, production and exports.” The Turkish government saw a budget deficit of close to $45.5 billion in 2023 after devastating earthquakes repeatedly hit southeastern Turkiye with the first five months of 2024, showing a gap of TL 472 billion, according to official data reported on June 20.

Fiscal experts point out that close to half of Turkiye’s  domestic corporate taxpayers either reported losses or no taxable income despite high revenues. Turkiye’s Treasury and Finance Ministry developed a hybrid model from studying systems in the EU and OECD nations, comparing taxpayer declarations with revenue and payment capabilities. Under the new regulations, a part of profit reported in the income statement will be considered a taxable base and the highest of the determined tax amounts will be taxed. In addition, the new law proposes implementation of a minimum income tax for individuals doing business in commercial, agriculture and freelance professions. The new model requires income reported by taxpayers cannot be less than a specified percentage of their declared profits as shown on their income and earnings statements. For those who are self-employed, the proposal would require a minimum threshold to be set with their reported income not less than the annual gross minimum wage. The package also proposes increasing the corporate tax rate from 25% to 30% on earnings that entities generate within the scope of projects under the build-operate-transfer (BOT) and public-private partnership (PPP) models.

Yazar

- Advertisement -

Daha Fazla

CEVAP VER

Lütfen yorumunuzu giriniz!
Lütfen isminizi buraya giriniz

- Advertisement -

Son Eklenenler