Prof. Dr. Duran Bülbül explains: Has the door to the informal economy been opened with the legislative change?

Ezgi Sivritepe-12punto/Exclusive

The Ministry of Treasury and Finance's Revenue Administration has increased the late payment interest rate, as stipulated in the first paragraph of Article 51 of Law No. 6183 on the Procedure for the Collection of Public Receivables, from 3.5 percent to 4.5 percent, to be applied separately for each month.

"IT WILL LEAD TO THE INFORMAL ECONOMY"

Prof. Dr. Duran Bülbül stated regarding this change that the late payment interest rate has never exceeded the deposit interest rate, and continued his remarks as follows:

"In a period when the economy is in crisis and people cannot pay their taxes, the Ministry of Finance has once again placed a serious burden on taxpayers. Instead of ensuring that taxes are paid, this decision will lead to the informal economy. Therefore, we are facing an interesting situation."

Noting that the late payment interest rate has been applied as 4.5 percent as of May 21, Bülbül said, "The late payment interest is 54 percent annually; 4.5 percent monthly, which means this: it will seriously bring tax evasion to the agenda and will seriously push taxpayers into the informal sector. Another dimension is that a late payment interest rate above deposit interest rates is not sustainable; this is a serious and dangerous situation."

THE MINISTRY HAS RAISED PRICES ON PRODUCTS!

With the General Communiqué on Collection prepared by the Revenue Administration, the deferred interest rates, which were applied at 36 percent annually, have been set at 48 percent. Bülbül commented on this situation as follows:

"This means the Ministry of Finance has implemented a hike of around 20-30 percent. The burden of the economy will be paid by taxpayers, the poor, and low-income families. These hikes will be reflected in markets."

Finally, Bülbül stated that the Ministry of Treasury and Finance has raised prices on all products by between 20 and 30 percent, and concluded his sentence by saying, "Taxpayers will reflect these recent tax hikes onto the market. This means that the prices of food products will increase."