Warning from 12punto columnist Meriç Köyatası regarding credit card mandate: How will it affect the economy?

Semih DEMİRHAN/ 12punto EXCLUSIVE

As the deepening economic crisis, rising cost of living, and the depreciation of the Turkish Lira continue to erode the value of money, citizens are increasingly making many purchases using credit and debit cards. Indeed, according to the released data, the number of transactions and payment amounts made with cards are increasing exponentially every month.

Former Ziraat Bank Deputy General Manager and Head of the International Finance and Banking Department at Başkent University, Prof. Dr. Şenol Babuşcu, also made a claim yesterday regarding this situation that dominated the agenda. Babuşcu stated that the Ministry of Treasury and Finance is working on a new regulation and that the use of a debit or credit card could become mandatory for all purchases of 7,000 TL and above.

According to Babuşcu's post, this practice envisions that individuals who are not taxpayers must also comply with this requirement for purchases over 7,000 TL; otherwise, a special irregularity penalty will be applied.

'IT MAY CREATE SOME DIFFICULTIES FOR LOW-INCOME INDIVIDUALS'

While the claim in question has caused a major stir in the economic world, 12punto columnist Meriç Köyatası made statements and shared some predictions regarding the issue.

Stating that making payments via credit or debit card is an important step in combating tax evasion and the informal economy, Köyatası said, "This is a decision that needed to be made. However, since a large segment of the population in Turkey is low-income, this situation could create some difficulties. It is a contradictory situation to encourage credit card usage on one hand, while implementing regulations to prevent debt on the other." he said.

"Predatory" interest rates could leave citizens in a difficult position, Köyatası noted, adding that since citizens generally use cash or other methods for payments under 7,000 TL, this change could particularly affect small businesses, and suggested "This situation could be balanced by offering more flexible payment options for small-scale businesses." he said.

'TRADESPEOPLE RECEIVING PAYMENTS WILL BE AFFECTED MORE'

Addressing the issue that the mandatory credit card usage could create problems for citizens with limited financial access, Meriç Köyatası said the following:

“If a person is spending over 7,000 liras, it indicates a different problem. In that case, this person can open a new bank account and make payments just like a bank account. Because they do not necessarily have to use a credit card; they can also carry out payment transactions with a debit card. However, when you go abroad, you may be met with suspicion even when making cash payments for small amounts like 50-100 Euros. Therefore, keeping expenditures on record is quite important.”

Stating that if the mandatory credit/debit card usage for purchases of 7,000 TL and above is implemented, it will affect the tradespeople receiving the payments more than the consumers, Köyatası added, “It is not just credit cards; payment methods have changed in general. Due to high bank commissions, people have started to prefer paying in cash or via wire transfer/EFT instead of using credit cards. This situation has even gone so far that institutions like notaries have started to demand payments via wire transfer instead of credit cards.” he said.

'THE TAX AUTHORITY NEEDS TO DEVELOP MORE EFFECTIVE METHODS'

Stating that this situation is less about tax evasion and more about a desire to avoid high bank commissions, Köyatası concluded his remarks as follows:

“Now a new problem has emerged: Who will we make the payment to via bank transfer? To the company or to an individual? If it is made to the company, the tax system works, but if it is made to an individual, tax losses may occur and it may contribute to the informal economy. To solve this problem, the tax authority needs to develop more effective methods”

News Source: Semih Demirhan