Soon they will tax the air we breathe: 2021 Turkish tax rates frustrate experts

K. Murat Yıldız / Duvar English

On Dec. 29 the new fees for official documents such as passports and Motor Vehicle Registration as well as other taxes for 2021 were published in the Turkish government's Official Gazette as being increased by 9.11 percent. Although this amount would not have been surprising under normal conditions, experts and taxpayers criticized the government for not taking into consideration the extreme economic hardships citizens are facing due to the COVID-19 pandemic.

Turks historically are very sensitive about taxes, so much so that it made its way into Turkish folklore, poetry, and even pre-Islamic mythology. Uprisings against heavy taxes during the Ottoman Empire were common. Moreover, heavy and sometimes inhumane taxation practices such as the ‘Varlık Vergisi,’ a capital tax levied on non-Muslims citizens in 1942, are still hotly discussed in Turkey today.

Despite pandemic, government meets taxation goals for 2020

“In terms of taxation, a variety of things could have been done differently under pandemic conditions. It's interesting to see that the governments’ tax collection forecast will be met in 2020. Last year this goal was not met," Nedim Türkmen, a tax professional and columnist for the daily Sözcü, told Duvar English.

As far as why this is, Türkmen believes that it is "a direct result of the increase in online sales due to the pandemic. Since online sales are done with credit cards, they are recorded and so we avoid the shadow economy which has been a fundamental problem in Turkey.”

“There is an undocumented shadow economy in Turkey that is as big as the official one, and the government has kept a close eye on it. The economic growth plan is based on this,” he stated.

Regarding the fundamental problem he sees with the Turkish taxation system as it currently operates, he said that the system “does not track or ask people about their increase in wealth. If it did, bribes and other irregularities would be obvious. They track the goods not the money. The system is based on indirect and unjust taxes. The money collected from alcohol and tobacco taxes is more than 860,000 registered corporate taxpayers. There are companies that pay less taxes than their workers on minimum wage.”

Farmers pay more tax for gas than private yacht owners

“Private yacht owners pay less taxes for gas than the farmers who use it for food production. The government could support employers under pandemic conditions with their social security costs and prevent unregistered employment. They could also take some tax weight off the shoulder of workers, but they don't do it,” Associate Professor of Financial Law Murat Batı told Duvar English.

Effects of pandemic were not taken into consideration

Batı and Türkmen are not the only experts with criticisms of the government's taxation system. “These taxes and fees are announced annually based on the new inflation rate. They announced it based on the inflation rate from September, so it is around 9 percent. Yet, because of pandemic conditions, they could have changed the relevant law in a single day. The president can use his authority and keep certain taxes lower, but they are acting like we are living under normal conditions,” Mustafa Özyürek, Turkey’s most prominent tax professional and former MP told Duvar English.

“When you buy gas from a station the tax is 80 percent. Only 20 percent is for the product. I was the head of Petrolofisi, a fuel distribution company formerly owned by the state. If we would close all the tax offices around the country, we would collect enough money just from gas stations,” Özyürek said jokingly.

You pay tax even while washing your hands

Özyürek points out that it is unfair to charge 18 percent VAT for convenience goods such as toothpaste, infant products, gas, and electricity.

“Even when you are washing your hands you pay taxes. This leads to injustice. So, we need to change our taxing system.”

“The president under the new system can change laws in 24 hours. There is no tax for diamonds, but 18 percent for baby food? This not fair or just. Turkey is an unjust country. Extreme injustice in the taxation system is no different," he added.

They don’t care about the people

“Look, I am being honest. I don’t record all of my income. Why should I? Every step I take is already being taxed. Soon they are going to tax the air we breathe,” an ironmaster from Istanbul told Duvar English.

“Ertuğrul Gazi, the father of Osman, the founder of the Ottoman Empire, told his son that he should ensure his people live well if he wants the state to survive. Now, they are just making sure that they are living well and they do not care about the people.”