Şeref Oğuz's viral MTV statement: 'It could be collected 4 times a year'

Economist Şeref Oğuz recently made headlines with his statements suggesting that tax rates could be increased following the local elections. Key points in Oğuz's remarks included comments on MTV taxes and the possibility of imposing taxes on those who own more than one home.

In his article on Ekonomim.com, Oğuz stated the following:

"Our budget deficit is reaching levels reminiscent of the 'Lost Years' of the 90s. According to January fiscal data, the state's budget expenditures amounted to 767.9 billion TL. Of these expenditures, 646.9 billion TL consisted of non-interest expenses. In the same period, budget revenues were 617.2 billion TL, with tax revenues reaching 517.2 billion TL.

We see that the budget balance is negative. This is not much of a surprise. These are known negative values, but at the point we have reached, there is a budget deficit of 150.7 billion TL. The non-interest balance is a negative 29.6 billion TL. These data reflect the country's performance regarding fiscal discipline and budget management.

THE IMPORTANCE OF 121 BILLION LIRA FOR THE ECONOMY

In January, interest expenses were 121 billion TL. So, what is 121 billion TL to the Turkish economy? The market value of 119 publicly traded companies on the stock exchange is 121 billion TL. In other words, we are paying as much in interest as the total market value of 119 companies. Arçelik's market value is 106 billion TL, and İskenderun Demir Çelik's market value is 119 billion TL. We are paying as much in interest as the total size of our companies that hold an important place in our country.

TWO QUESTIONS, TWO ANSWERS

Do we have to pay interest?

If we do not cut our coat according to our cloth, there is a cost to this, and we have to pay it as interest. If there is no money, we will either run the banknote printing press or impose new taxes. Remember, the communication tax that came temporarily under the pretext of the earthquake stayed for a sleepover and never left.

What do you mean by new taxes?

For instance, the Motor Vehicle Tax (MTV), which has already been doubled, could be made to be collected every 4 months or every 3 months (i.e., 3 or 4 times a year) instead of just twice a year. That's not enough; a 'cylinder tax' could be introduced for every vehicle with a cylinder volume above 1600 cc. Is that enough? Hardly. Next in line is an extra housing tax to be collected from those who own more than one home, which is quite a spectacle. It doesn't end there... There are also plans for upward-climbing rates for every goods and services group (including food) in VAT and SCT... Even pushing the base VAT to 25% is among the options being considered.

NOTE

MY PRESENTATION ON ADVANCE TAX

Whenever the government is short on cash, it plays with taxes. The coffers are empty, and since 'savings cannot be made from prestige(!)', they go to the citizens and say, 'reach into your pockets.' Whatever God gives, whether you earn it or not, money is demanded from you. Because money is needed for expenses that are like a bottomless pit.

During the 'Lost Years' of the 90s, our pockets were picked under the name of advance tax and temporary tax. While the 'foxes' who managed to stay off the books for budget deficits expressed in quadrillions roamed freely, the feathers of the geese in the coop were plucked in advance. Because money was needed for the cronies of the era, for their SOEs and municipal enterprises.

At that time, the budget's resources were strained to transfer funds to business people who managed to get into the 'family photo(!)', and when there were no appropriations left, we were taxed in advance. Instead of objecting to this situation, our prominent economic NGOs acted like partners of the government and practically legitimized these taxes.

Now, there is no money in the coffers either. The largest expenditure item of the budget deficit is interest payments... Should the cronies go hungry? If there is no money, what are taxes for? If they come to the citizens after April 1st with an 'advance tax' as if a 'tight money program' were not enough, do not perceive this as an 'April 1st joke,' just pay it(!)"