Release: September 22, 2023
In the news that has been reflected to the public in the last month; We hear that the Ministry of Treasury and Finance is “working on accelerating collections” through tax inspectors and tax office personnel. I think a question like this should come to our mind: While the restructuring regulation was made by Law No. 7440 in March 2023 regarding the debts that are due and unpaid until 31.12.2022, which unpaid debt is being accelerated? Today we will find the answer to this question together.
Within the scope of Law No. 7440; The opportunity to restructure in 48 monthly installments was provided for the unpaid tax debt of 552 billion TL, which was due on 31.12.2022. We know that within the scope of this regulation, 5.5 million taxpayers have restructured their debts of 370 billion TL. The table below includes the collection amounts.
Within the scope of accelerating collection; Taxpayers are asked to pay 50% of the overdue but unpaid debts immediately, and the remaining amount in 3 installments by the end of the year. Despite 6 restructuring laws ped in 7 years, the table showing the situation requiring acceleration of collection is given below.
Why did tax collection decrease in 8 months?
The amount of budget revenue that the state could not collect as of 31.12.2022 is 1 trillion 111 billion TL, of which 552 billion TL and 638 million TL consist of uncollectible taxes. As of 31.8.2023, the amount of uncollected budget revenue has increased to 1 trillion 562 billion TL, of which 868 billion 980 million TL consists of uncollectible taxes. Although the collection/accrual ratio was 71.2% in general budget revenues and 81% in tax revenues on 31.12.2022, as of 31.08.2023, the collection/accrual ratio decreased to 65.3% in general budget revenues and 74.9% in tax revenues.
There are two important topics that taxpayers who cannot access the loan choose not to pay. These are “domestic Value Added Tax” and “Income Tax withholding”. While the amount of “domestic Value Added Tax” that could not be collected as of 31.12.2022 was 191 billion 271 million TL, as of 31.08.2023, this figure increased to 303 billion 477 million TL. Again, while the “Income Tax withholding amount” that could not be collected as of 31.12.2022 was 59 billion 54 million TL, as of 31.08.2023, this figure increased to 86 billion 270 million TL. As a result; Taxpayers who cannot get a loan from the bank use a loan from the Ministry of Finance with an annual interest rate of 30%. Moreover, there is no guarantee.
While the cost of 100 TL tax collection to the tax administration is 46 kuruş, when we consider that the cost of borrowing is over 10% annually in USD; With such a cheap resource, it is of course right to focus on accelerating collections in a way that minimizes the need for more expensive borrowing. Tax inspections and collection efforts were already put on hold due to the impact of the elections. Taxpayers are forced to collect through the threat of electronic liens, and collections are made to the extent possible.
In our country, where economic models contrary to science and reason are implemented through trial and error; It is important to remember that not only 85 million citizens are affected by this situation, but also taxpayers are affected during efforts to speed up collection.