Rumors are swirling the AK Party will soon introduce long-awaited tax reform
The AK Party has begun to signal that radical tax reform, which has been on the agenda for years, will begin sometime after the March 31 elections. The reforms, which were mentioned in the New Economic Program announced in September 2018, are expected to be instituted this year. Treasury and Finance Minister Berat Albayrak pointed out the importance of tax reform in the General Assembly of the Tax Council and stated that they evaluated and designed the tax system with a holistic approach. The legal regulation on tax reform will to be submitted to the parliament in the first half of the year.
Minister Albayrak announced that the target of the tax reform would be to supply a simpler, more effective, broad-based and fair structure for the tax system and the simplification of tax legislation. Exemptions, dispensations and reductions which are not effective, will be removed gradually with the tax reform and no new exceptions, exemptions or reductions will be introduced unless necessary, Albayrak said. Tax compliance of taxpayers will be strengthened and transition to the registered economy will be accelerated.
Advisory commissions, consisting of the Tax Council, academics and lawyers, are continuing their work on the reforms, though their recommendations have not been released to the public. A tax system that complies with the New Economy Program is envisaged, which is also expected to support the Istanbul Financial Center target. In this context, regulations that will supply the necessary legal, physical, human and taxation infrastructure will be made in order to turn Istanbul into a regional and global financial center and develop and deepen the financial system in Turkey.
Another remarkable statement by Albayrak was the fund to be set up for the diversification of financing instruments. The details of the new fund, which were intended to give depth to capital markets, will also be available to the public after the local elections on March 31.
The new fund is expected to take shape earlier while the tax reform will be spread over time as the parliamentary process is taken into consideration.