Experts put 'Tax Reform' on the table: 'The felt burden is very high'

Numerous experts and faculty members attended the panel titled "New Perspectives on Tax Reform," organized by the Atılım University Department of Public Finance on Tuesday, May 14.

The panel, where tax reform was discussed, was hosted by Atılım University Department of Public Finance Head Prof. Dr. Doğan Cansızlar, as well as Department of Public Finance faculty member Prof. Duran Bülbül and Head of the Department of International Trade and Logistics Prof. Dr. Nevzat Saygılıoğlu. Participants included Ondokuz Mayıs University Faculty of Law Department of Fiscal Law Head Prof. Dr. Murat Batı, Ankara University SBF faculty member Prof. Dr. Dilek Özkök Çubukçu, and Chief Tax Inspector Ertan Güvendi.

In his speech, Department of Public Finance Head Prof. Dr. Doğan Cansızlar noted that establishing a reasonable balance between direct and indirect taxes within the tax system is quite important for ensuring justice in taxation, and stated that it is essential to create a tax system that also takes into account the social and economic effects of taxation.

Cansızlar reminded that as long as taxes are merely increased under the name of 'reform' without implementing fundamental expenditure reforms and without doing so within the framework of a holistic program, the expected benefits from these reform results cannot be achieved.

On the other hand, Cansızlar made the following suggestions:

-Ending the tax amnesties that have been implemented every 1.5 years recently, as they damage tax perception and tax payment awareness

-Reintroducing practices that previously existed in the system, such as wealth declaration, expenditure-based taxation, and standard of living assessments, instead of a wealth tax that could cause problems in practice

-Issuing a decree regarding tax havens that would provide opportunities for combating the informal economy/money laundering and also provide additional tax revenue

-Reviewing and reducing exceptions and exemptions related to tax expenditures

-Ensuring that new taxes to be introduced for fiscal purposes within the scope of taxing the digital economy, including crypto assets, do not lead to capital flight from the country, and that regulations are made in parallel with international regulations

-Introducing new and additional financial and penal sanctions within the framework of on-site audits and accountability regarding non-compliance with austerity measures

Ondokuz Mayıs University Faculty of Law Department of Fiscal Law Head Prof. Dr. Murat Batı pointed out that the level of development could decrease because indirect taxes are high.

Batı recommended that the share of indirect taxes in Turkey be reduced and the declaration system be expanded, emphasizing the necessity of reducing practices such as withholding, exemptions, and deductions. He drew attention to the fact that there are too many temporary tax laws and the importance of simplifying the legislation.

Head of the Department of International Trade and Logistics Prof. Dr. Nevzat Saygılıoğlu argued that a "net increase theory" should be adopted in income tax, all income should be collected and declared in the tax return, the minimum living allowance should be reintroduced for everyone, and the scope of tax expenditures should be reviewed.

Regarding wealth taxes, Saygılıoğlu stated that these taxes have a weak fiscal aspect and that simplification should be pursued here. Saygılıoğlu called for the abolition of inheritance taxes and taxes such as the valuable housing tax.

Stating that looking at some important tax reforms implemented in the past and in different geographies and their results provides experience, Prof. Dr. Dilek Özkök Çubukçu stated that in this context, one of the most global results is the Value Added Tax reform.

Özkök also said that the tax originating from the French tax system is applied in 160 countries in the world today.

Özkök underlined that tax reform is not a unilateral legislative act, stating that inclusivity in taxation and communication between parties are the primary rules for resolving problems in the tax system.

Prof. Dr. Duran Bülbül made a series of suggestions regarding taxation on income.

Bülbül listed his suggestions as follows:

Rearranging tariffs for taxes taken on income, taxing wage income at a fixed rate, declaring wage income with an annual tax return; regarding taxes taken on expenditures, keeping fees at a reasonable level, expanding the scope of the Special Consumption Tax (ÖTV); regarding taxes taken on wealth, taxing real estate tax based on the actual sale price, changing the tax base of the valuable housing tax, and including motorized sea vehicles in the scope of the Motor Vehicles Tax (MTV).

Chief Tax Inspector Ertan Güvendi reminded that although the tax burden in Turkey remains quite low according to OECD averages, the felt tax burden is very high, and touched upon the high level of the informal economy in Turkey and the inadequacy of sanctions.

Güvendi emphasized the importance of combating tax evasion for an effective reform. Saying "Tax is never just tax!", Güvendi stated that taxation is a matter of social engineering.