24-point solution list from the Union of Municipalities of Türkiye regarding the issue of municipal SGK debts

The Union of Municipalities of Türkiye (TBB) has taken action against new policy decisions regarding the public debts of municipalities and the tracking of these debts. Following the issuance of notices to certain municipalities by the Ministry of Treasury and Finance and the Social Security Institution (SGK), the union prepared a 24-point solution proposal.

In an official letter sent to the Ministry of Labor and Social Security, the Ministry of Environment, Urbanization and Climate Change, and the Ministry of Treasury and Finance, it was recalled how the public debts of municipalities and their affiliated organizations are to be paid. The letter stated, "It is stipulated in the second paragraph of Article 7 of Law No. 5779 on the Allocation of Shares from General Budget Tax Revenues to Special Provincial Administrations and Municipalities that debts tracked under Law No. 6183 and debts to social security institutions shall be deducted and paid by the Ministry of Treasury and Finance or the Iller Bank upon the request of the creditor administrations, as appropriate."

'TAX, DUTY, AND FEE REVENUES CANNOT BE SEIZED'

In the official letter sent to the relevant ministries, signed by TBB Secretary General Suat Yıldız on behalf of TBB President Ekrem İmamoğlu, the provision in the final paragraph of Article 15 of the Municipal Law No. 5393 was also recalled: "Revenues obtained by the municipality through project-based borrowing, conditional donations, goods actually used in public services, and tax, duty, and fee revenues collected by the municipality cannot be seized."

It was emphasized that there is a need for a new regulation that would prevent deductions based on political preferences, ensure the uninterrupted provision of local services, definitively allow for the securing of a minimum income, and provide payment convenience to municipalities, as intended by the relevant provision.

'IT IS A REALITY THAT PUBLIC DEBTS CANNOT BE PAID ON TIME OR IN FULL'

Reminding that, like all employers, municipalities, their affiliated organizations, and companies are required by legislation to pay their tax and insurance premium debts, the statement included the following: "It is a reality that deviations have occurred in municipal budget balances due to reasons such as the deteriorating balance of the economy, the inability to keep municipal revenues current, the burden of refugees, municipal debts carried over from previous periods, the rejection of external borrowing permits, the inability to obtain letters of guarantee from banks, and the failure to use aid allocations to municipalities in an inclusive manner, and that public debts cannot be paid on time or in full."

It was also emphasized that placing municipalities and their companies under the pressure of seizure would not contribute to the healthy progression of the relationship between local governments and the central administration, and would hinder the fulfillment of local services mandated to municipalities by law.

The statement continued: 'It is known that the extension of the deadlines in Provisional Article 8 of Law No. 6183 on the Procedure for the Collection of Public Receivables and Provisional Article 41 of Law No. 5510 on Social Insurance and General Health Insurance, through the initiatives of our Union and the positive approach of the relevant institutions, has provided payment convenience to municipalities and their companies. A similar new regulation will both accelerate collection for creditor institutions and ensure that local services are carried out without interruption.'

24-POINT PROPOSAL PACKAGE

In the letter sent to the Ministry of Labor and Social Security, the Ministry of Environment, Urbanization and Climate Change, and the Ministry of Treasury and Finance, it was stated that the following measures would accelerate the collection of creditor institutions and ensure that local services are carried out without interruption: The following requests were listed on behalf of all municipalities in the 24-point proposal package:

1) First and foremost, the cessation of initiatives such as follow-ups and attachments that prevent municipalities from producing services,

2) Enabling the payment of debts within a culture of reconciliation by enacting a new restructuring law, 3) Providing at least a 10% discount on public debts to encourage municipalities and their companies that pay their debts regularly,

4) Stopping the accrual of interest on public debts during periods when deductions from municipal shares are suspended,

5) Increasing the distribution criteria in Law No. 5779, 

6) Granting municipal councils the authority to determine tax and fee tariffs within legal limits, 

7) Redetermining the lower and upper limits of tax and fee tariffs belonging to municipalities, 

8) Re-evaluating Article 7 of the Provisional Law No. 2464 to include the Revaluation Rate (YDO),

9) Re-evaluating Law No. 2464 to include current revenues, 

10) Reviewing the Property Tax regulation, 

11) Removing general lighting expenses from municipalities, 

12) Leaving the Contribution Share for Cultural and Natural Assets to the municipalities, 

13) Collecting road and traffic contribution shares from the Motor Vehicle Tax, implementing tax reductions in public transportation, and compensating for the financial losses of municipalities and their companies in free/discounted transportation, 

14) Regulating the Accommodation Tax as municipal revenue, 

15) Including 'archaeological sites' in the share of Museum Entrance Fees,

 16) Offsetting the VAT collected from investment services against municipal debts, 

17) Offsetting half of the expenses incurred by municipalities for the construction of schools, dormitories, and health facilities against municipal debts,

18) Exempting municipalities from litigation fees, 

19) Not charging fees for municipal services in highway crossings and forest areas,

20) Establishing the electricity tariff consumed in water and wastewater facilities to be half of the industrial tariff, and not charging VAT on municipal electricity expenses, 

21) Abolishing Development Agency Shares, 

22) Abolition of the environmental contribution share deducted from SUKİ revenues, 

23) Re-evaluation of zoning fines, 

24) Ensuring our Union's participation in all efforts to be made regarding the coverage of the financial burden on municipalities hosting refugees...