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Paying lip service
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For many years everybody has known how sensitive I am about tax paying. There are miscellaneous tax laws that are in effect in the country. Actually we set up the system about half a century ago and then mainly based on tax revenues we made palliative amendments to it. In recent years copying the West and introducing Value Added Tax, or VAT, and the special expenditures tax, or ÖTV, we tried to enlarge the system.
We have to face the facts. In Turkey we are unable to collect revenue taxes and we haven’t renewed our system since 1946. If I may give you a small example, we can clearly see that there is a direct relationship with the number of tax payers and voters in many countries in the world. But there is no such relationship in Turkey. In Turkey the number of voters is nearly 45 million people but the rate of tax payers is not even one-eighth of this number. In it, corporate tax payers, indirect tax payers, everybody is included.
It is incredible but true. Until last year 85 percent of corporate taxes were paid by only 11 or 12 large companies. Maybe this year this amount will increase but not nearly as high as one-fourth of the money we seek to get from the IMF. In developed countries around the world tax paying also means registered economy. Speaking concisely everybody reaching the age of 18 has to have a tax payer’s number and submit tax returns. Doing this you register every citizen and you are able to scrutinize their expenditures and revenues.
To be able to control these expenditures you also have to grant certain amounts of immunity. In other words, from the gasoline you put into your car to the guest you invite to diner, from the invoice you get from your dentist to the money you pay as your child’s school fee, you have to be able to get a tax deduction. If you can do this transparently you will be able to overcome unpaid taxes in your economy and increase resources.
Today politics has become the end result of unpaid taxes. It is impossible to trace the sources of the money spent for the elections. It is also impossible to learn how this money was gained, although it is vitally important to be accountable especially during elections.
If you raise funds for election campaigns and get tax deductions for the amount of money you spend, then you create transparency. If you don’t do it politics will not get rude and rough, politicians will not resort to foul language and every day you won’t be witness to another corruption case. Consequently politics will be channeled in the correct way. As the system has never been transparent in big cities, big companies always have problems with tax offices. When tax officials under the ruse of applying the law and defending public interests pay lip service to what they do then everything gets out of hand. As the system, the related law articles or the language used is not transparent and net then the government feels the right to interfere.
I am getting certain unfortunate news, which I want to relate to you in examples. Let’s say you are a tax payer and the tax office asked you to submit your books about certain years. You bring them to the tax office and in return you get a document.
Two years later you are again summoned to the tax office asking you to bring along those particular books. You rush to the tax office. The document is scrutinized by the official closely. In the end you are told that all those stamps, the signatures are hoaxes and you are fined for trillions of liras for not submitting your balance books.
You can reach an agreement, you can go to court, there are those intermediaries. There is big money obtained from these taxes. To overcome all these problems people have gotten used to straightening out such matters by their own means. But one day when things become serious people will start panicking. Can you imagine that there are 10 million Turkish citizens who have court cases against their own state? Most of these cases are about tax paying.
We are having one more election, which has turned from a local one to a general election atmosphere. In this election period we need a revenue tax system that will not create conflicts between the tax payer and the bureaucrat and which will not hurt the government’s image. You cannot solve this problem by creating a Tax Revenue Directorate or telling the IMF that you will postpone certain legislations.
You either renew confidence among the electorate or you will not get a vote of confidence. The ones who renew confidence and the ones who think they are to get a vote of confidence have to give priority to find solutions to the tax problem.
It is incredible but true. Until last year 85 percent of corporate taxes were paid by only 11 or 12 large companies. Maybe this year this amount will increase but not nearly as high as one-fourth of the money we seek to get from the IMF. In developed countries around the world tax paying also means registered economy. Speaking concisely everybody reaching the age of 18 has to have a tax payer’s number and submit tax returns. Doing this you register every citizen and you are able to scrutinize their expenditures and revenues.
To be able to control these expenditures you also have to grant certain amounts of immunity. In other words, from the gasoline you put into your car to the guest you invite to diner, from the invoice you get from your dentist to the money you pay as your child’s school fee, you have to be able to get a tax deduction. If you can do this transparently you will be able to overcome unpaid taxes in your economy and increase resources.
Today politics has become the end result of unpaid taxes. It is impossible to trace the sources of the money spent for the elections. It is also impossible to learn how this money was gained, although it is vitally important to be accountable especially during elections.
If you raise funds for election campaigns and get tax deductions for the amount of money you spend, then you create transparency. If you don’t do it politics will not get rude and rough, politicians will not resort to foul language and every day you won’t be witness to another corruption case. Consequently politics will be channeled in the correct way. As the system has never been transparent in big cities, big companies always have problems with tax offices. When tax officials under the ruse of applying the law and defending public interests pay lip service to what they do then everything gets out of hand. As the system, the related law articles or the language used is not transparent and net then the government feels the right to interfere.
I am getting certain unfortunate news, which I want to relate to you in examples. Let’s say you are a tax payer and the tax office asked you to submit your books about certain years. You bring them to the tax office and in return you get a document.
Two years later you are again summoned to the tax office asking you to bring along those particular books. You rush to the tax office. The document is scrutinized by the official closely. In the end you are told that all those stamps, the signatures are hoaxes and you are fined for trillions of liras for not submitting your balance books.
You can reach an agreement, you can go to court, there are those intermediaries. There is big money obtained from these taxes. To overcome all these problems people have gotten used to straightening out such matters by their own means. But one day when things become serious people will start panicking. Can you imagine that there are 10 million Turkish citizens who have court cases against their own state? Most of these cases are about tax paying.
We are having one more election, which has turned from a local one to a general election atmosphere. In this election period we need a revenue tax system that will not create conflicts between the tax payer and the bureaucrat and which will not hurt the government’s image. You cannot solve this problem by creating a Tax Revenue Directorate or telling the IMF that you will postpone certain legislations.
You either renew confidence among the electorate or you will not get a vote of confidence. The ones who renew confidence and the ones who think they are to get a vote of confidence have to give priority to find solutions to the tax problem.
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