"Combating illegal trade requires not only law enforcement but also new regulations"

Evaluating the statements made at the 'Combating Illegal Trade' conference organized last week by the Ankara Chamber of Commerce (ATO), which was also attended by Minister of Trade Ömer Bolat, BDO Turkey managing partner and certified public accountant Emrah Akın said, "The conference held was extremely important in terms of examining the informal economy, one of our country's major problems, from every aspect. The issue of the informal economy is one of the biggest problems for Turkey; while we do not have an official figure, it is estimated that the size of the informal economy is 25 percent. Roughly assuming that Turkey has a gross national product of 1 trillion dollars, we are talking about a loss of 250 billion dollars. The informal sector has never been zero in any country in the world, but we must take radical and necessary measures and reduce this share as much as possible. I believe that if we can limit the size of the informal economy, the budget deficit problem can also be prevented," he said.

STRIKING FIGURES

Emphasizing that the statements made by Minister of Trade Ömer Bolat at the conference were extremely important, Akın said, "The Minister shared current figures and explained the contributions of law enforcement agencies in the fight against the informal sector. He announced that as a result of operations carried out by the General Directorate of Customs Enforcement within 11 months this year, 17 billion 200 million liras worth of smuggled commercial goods were seized, and a total of 22 billion liras worth of confiscations were made at customs. Compared to the first 11 months of 2022, there has been a 94 percent increase in seizure figures. Many smuggling attempts have been thwarted, from cigarettes to fuel, alcoholic beverages to electronic devices, food to textile products, medical supplies to machine parts, and historical artifacts to endangered live animals. The Minister underlined that the fight against illegal trade has a very important function in terms of preventing tax loss, ensuring fair trade, and preventing unfair trade. Among the seized products were 1,375 tons of fuel, 4 million 743 thousand electronic items, 1 million 130 thousand packs of cigarettes, 389 million macarons, 47 million cigarette paper filters, 1 million 165 thousand electronic cigarettes and components, 4 thousand 700 tons of food, 3 thousand 924 historical artifacts, and 11 tons of narcotics," he stated.

SMUGGLERS HAVE UPDATED THEMSELVES

Stating that another point that drew attention in Minister Bolat's statements was that new categories of tobacco products are now on the list of untaxed, i.e., illegal products, Akın said, "Like trade, illegal trade is also updating itself. We are no longer seizing as many packs of cigarettes as we used to. As can be seen from the figures, while 1 million 130 thousand packs of cigarettes were seized, enough macarons to produce 40 million packs of cigarettes were confiscated. Heated tobacco products and electronic cigarettes, which are regulated in countries like England and Japan but have no regulation in our country, have also entered the list of seized illegal products. 1 million 165 thousand electronic cigarettes were seized. In a study we recently conducted with Istanbul Research, we determined that 18 percent of tobacco product users have turned to these products and that the figure is on an upward trend. We calculated the tax loss here to be approximately 20 billion TL with different calculations, and its burden on the current account deficit to be around 7 billion dollars," he said.

COMBATING REQUIRES NOT ONLY LAW ENFORCEMENT BUT ALSO NEW REGULATIONS

Emrah Akın stated that law enforcement agencies have a critical role in the fight against illegal trade, saying, "Illegal trade has many disadvantages, such as the current account deficit, losses in tax revenues, grievances of users, and health problems as can be seen in alcohol. For example, we see more news of deaths due to bootleg alcohol around the New Year. The serious work of our customs regarding the issue is evident in the increase in seizures over the years, but we must also fight these with regulations in our tax system. To give another example, we can cite illegal fuel; with the sliding scale system, the reflection of price increases to the consumer in diesel, gasoline, and autogas was prevented by reducing taxes. This also reduced the rate of smuggling in these products," he said.