Gürsel Baran: A good tax system paves the way for the country's economic growth

ATO President Gürsel Baran issued a written statement expressing his views and suggestions regarding the tax system. Noting that a good tax system paves the way for the country's economic growth and income distribution justice, Baran said, "Our tax system is managed by a law enacted in the 1960s that has been updated through many amendments. While the share of indirect taxes in total tax revenues was around 35 percent in the 1980s, this rate has now exceeded 50 percent. The fact that the legislation is outdated and that the weight of collected taxes has shifted to indirect taxes reveals the need for tax reform," he said.
Drawing attention to a comprehensive tax reform to be carried out in Turkey, Baran stated, "Simplifying taxes and moving to a single-rate system not only ensures tax justice but also paves the way for entrepreneurship by reducing tax procedures and increases collection rates. We believe that our economic management, under the leadership of our President Recep Tayyip Erdoğan, will achieve simplification in the tax system," he said.
Baran also said it was gratifying that Vice President Cevdet Yılmaz emphasized their determination regarding tax reform during his speech at the Grand National Assembly of Turkey (TBMM) General Assembly during the deliberations on the 2024 Central Government Budget Law Proposal.
Stating that the issue of taxation is an unchanging agenda for Turkey, Baran said, "Tax revenues, which provide resources for public spending and investments ranging from education to health, are constantly on the agenda in our country. Due to collections that cannot be realized as much as the accruals, tax amnesties are frequently issued. With every new tax amnesty, the taxpayer's reflex to pay declines almost as much as the actual collection, with the thought that 'a new amnesty will be issued anyway'," he explained.
Reminding that efforts to improve tax systems are also being carried out in world economies, Baran noted that steps should be taken towards a single-rate system and simplification, as is practiced in many countries around the world.
Baran included the statement, "In the current tax system, different rates in Value Added Tax (VAT), and even different rates applied in purchases and sales, wholesale and retail within the same sector, make the system complex, and this difficulty is also reflected in tax collection rates."
In his statement, Baran also expressed that income tax brackets and SGK (Social Security Institution) upper limits, which affect all wage groups, should be updated, saying, "Our employees' salaries decrease after 1-2 months due to the tax bracket. This causes them to receive approximately 20 percent less wages towards the end of the year. In order not to affect employment and to prevent the welfare level of employees from declining, tax brackets need to be updated," he said.
Stating that the discount practice applied to tax-compliant taxpayers is important because it is encouraging, Baran underlined that the procedures for the discount practice granted to tax-compliant taxpayers should also be simplified.