Corruption risks, tax transparency, and money laundering

It is possible to observe an intertwined cause-and-effect relationship between the informal economy, corruption, and the informal state, meaning they are both the cause and the result of one another. There are certain factors that provide the link between the informal economy, corruption, and the informal state.

At the forefront of these factors are funds. As stated above, the result of political and bureaucratic actors using funds to maximize their own interests, coinciding with the desires of individuals who are also pursuing their own interests, is the emergence of an informal state that merges with the informal economy and corruption. As is known, criminal organizations that launder money must utilize public officials who can provide them with benefits and cooperate with them from within public decision-making mechanisms in order to maintain their existence.

No criminal organization that cannot utilize public officials can continue its activities. As a result, it is observed that public officials who cooperate with criminal organizations in the public sector act in line with the interests of these criminal organizations, leading to corruption. Criminal organizations seek to gain the backing of public power in various ways by making contact with those public officials within the state who are willing to cooperate with them.

Criminal organizations that capture public officials through opportunities such as bribery, favors, nepotism, providing benefits, and prostitution will, over time, begin to use these individuals as if they were any other element in the organization's hierarchical structure. Criminal organizations desire the continuation of illicit gain on one hand, while on the other, they seek to exploit these public officials through blackmail by documenting the bribes or benefits they have provided to them.

Corruption and money laundering are two important elements that feed each other. Criminal organizations want to be influential in the public sector, especially in decision-making mechanisms considered key points, with a significant portion of the dirty money they obtain. Thanks to a system where public institutions are corrupted and the interests of corrupt public officials and criminal organizations are prioritized instead of public interests, criminal organizations will continue to grow by easily laundering the dirty money they obtain.

In this situation, public authority will be lost in the eyes of individuals, and criminal organizations will become an effective power. What needs to be done for an effective fight against corruption is to impose heavy penalties on public officials involved in corruption, which creates a deterrent for other public officials.

The amount of money stolen from developing countries each year is between 50 billion dollars and 1 trillion dollars. This money flows into a handful of specific cities fed by offshore accounts and tax havens. Some of these cities are Miami, New York, Los Angeles, London, Monaco, and Geneva. It is, of course, impossible to sustain healthy democracies or establish honest political systems in countries whose economies have become this distorted.

Turkey ranks as the second-lowest country after Mexico in corruption perception and corruption control indices. Additionally, while the OECD average regarding corruption control has followed a stable course over the years, corruption control in Turkey has shown major changes over the years. In this context, while the largest decline occurred in 2002, it is observed that there has been a very serious downward trend regarding corruption control since 2016. Analyses comparing international data also show that the increase in corruption incidents in our country in recent years is not a coincidence.

Furthermore, Turkey ranks last among OECD countries in terms of tax transparency, and our country is seen as a place where tax-related information is often unavailable when requested. Finally, when compared to OECD countries, Turkey generally follows a course below the OECD average in internalizing and implementing anti-money laundering measures.

In the 2023 Corruption Perceptions Index, Turkey ranked 115th with 34 points, while according to the 2024 Corruption Perceptions Index results, Turkey ranked 107th with 34 points.

While Turkey's score remained unchanged compared to last year, the rise in the ranking was due to changes in other countries. It is of great importance for Turkey to increase its score by making effective reforms in the fight against corruption. Turkey urgently needs to establish an "Anti-Corruption Agency."