Tax favor for money from abroad: 'Authoritarianism is being financed by dirty money'

While international mafia leaders and drug barons are being captured in Turkey almost every day, a new legal regulation prepared by the government has sparked major controversy. With the regulation, which is being evaluated as a new 'Asset Peace', an income tax exemption is being introduced for 20 years for earnings brought from abroad, without questioning their source. Economist İnan Mutlu reacted to the decision with the words, "Authoritarianism is being financed by dirty money."

The new regulation, prepared with an amendment to the Income Tax Law No. 193, has been published in the Official Gazette. With the "Repeated Article 20/D" added to the law, an unprecedented tax exemption is granted to assets brought from abroad and earnings obtained.

The most striking clause of the law includes the following statements:

"Earnings and revenues obtained outside of Turkey by real persons considered to be residents in Turkey are exempt from income tax for twenty years, provided that they did not have a residence and tax liability in Turkey in the last three calendar years before being considered a resident in Turkey."

SOURCE WILL NOT BE QUESTIONED, NO TAX FOR 20 YEARS

According to the regulation, individuals who have not been tax residents in Turkey and have not had a residence in the last three years will not pay income tax for a full 20 years on all earnings they obtain from abroad if they settle in Turkey. Moreover, no annual tax return will be filed for these earnings, and even if a tax return is filed due to other income, this money will not be included in the return.

 The government's offer of such a long-term tax exemption without questioning "where and how" the billions of liras of funds brought from abroad were earned is being criticized on the grounds that it makes the system open to illegal funds.

"AUTHORITARIANISM IS BEING FINANCED BY DIRTY MONEY"

Pointing to the damage that the legal regulation in question will cause and the risks of the Turkish economy in the grey list/dirty money spiral, Economist İnan Mutlu evaluated the decision with striking words.

Pointing to the effects of capital inflows of uncertain origin on the country's political and economic structure, Mutlu expressed his reaction to the practice with the words, "Authoritarianism is being financed by dirty money." Economists emphasize that such implicit asset peace practices deeply shake tax justice and punish honest taxpayers.

News Source: 12punto