Mahfi Eğilmez reacts to credit card levy: 'Tax is collected from the creditor, not the debtor'

Economist Mahfi Eğilmez responded via his social media account to discussions about plans to deduct a fund share from credit cards in order to provide additional resources for the defence industry fund.

Eğilmez stated that such a practice would not be legal, saying, "Tax cannot be levied on either the credit card limit or the credit used."

'TAX IS COLLECTED FROM THE CREDITOR, NOT THE DEBTOR'

Eğilmez, in a post on his X account, said: "I don't think the administration would make such a mistake, but let me say it anyway: tax cannot be levied on a credit card limit or on credit used. Credit is a debt. Tax is collected not from the debtor but from the creditor who extends the credit."

Eğilmez, in his remarks, stressed that withholding tax on credit card debts is neither economically nor legally sound, saying, "The further we stray from science, the deeper we sink into a terrible conceptual confusion."

WHAT HAD HAPPENED?

In the new legislative proposal submitted by the AKP to the Grand National Assembly of Turkey (TBMM), it is planned to deduct an annual fund contribution of 750 Turkish Lira from credit card holders with a limit of 100 thousand Lira or more.

Additionally, in real estate purchases and sales, a mandatory deduction of 750 liras each will be applied separately to the buyer and the seller, while 375 liras will be deducted for other transactions carried out at the land registry office.

Under the new regulation, a deduction of 3,000 liras will be applied for new vehicle registrations at notaries, and 1,500 liras for second-hand vehicle purchases and sales.

The proposal also includes bringing motorcycles under 100 cc and motorcycles with an engine power of 6 kW or below within the scope of the motor vehicle tax, as well as subjecting drones and wristwatches with a special consumption tax base exceeding 5 thousand liras to taxation.