Union of Chambers and Commodity Exchanges of Turkey

The Treasury Account Experts Association’s “Turkish Tax Audit System in Light of the Applications in Developed Countries” panel was held at the Ankara Swiss Hotel.

In his speech, TOBB President M. Rifat Hisarcıklıoğlu stated in his speech emphasized that this structure must be changed. Hisarcıklıoğlu said that there is a primary tenet in economics, according to which, increase in tax rates will result in increase in off-the-record economy.

Explaining that the drop in SSK rates hastened many going on the record, Hisarcıklıoğlu said, “As the private sector, we employed 1.3 million people in 2011. Of these, 1.12 million started their jobs on record. This means that the registered employment rate is 85%. Now, am I creating off-the-record economy or is the system pushing me to do it? Off-the-record economy is directly influenced by democracy. In actuality we have the right to ask any question and expect an answer. I travel around Turkey all the time. I’ve always asked this: How many people will present their books when a summons is received from the Treasury without hesitation? If I keep my records according to Clause 25, I will be fined according Clause 30; if I keep my records according to Clause 30, I will be fined according to Clause 25. We always get the beating. They say that the private sector is the center of off-the-record economy. This is more to do with the human nature.”

- How does the system push people off the record?

Hisarcıklıoğlu gave an example on how the system pushes people to off-the-record economy. Stating that on the way to Çorum, upon seeing ‘Cheap Diesel Fuel’ that he’d checked out the price, Hisarcıklıoğlu went on, “They are selling cheaper than the refinery price; you’d think they were sitting on an oil well. How is this possible? Because it is smuggled. Let’s say that next to it is my gas station in which I’ve invested in. I employ 10 people. I am in debt. Would you care to tell me how I could compete with him? What am I supposed to stay afloat? If I don’t do what he’s doing I would go under.”

- Countries are competing in terms of tax rates

Stating that the first thing needed are affordable tax rates, Hisarcıklıoğlu emphasized the need to renew the system accordingly. Stating that there is competition between countries in terms of tax rates, Hisarcıklıoğlu said, “We’ve lowered institutional tax to 20%, as you well know. During that time, the Slovakian Union of Chambers and Exchanges President was my guest. I reported that we had lowered the tax to 20%. The guest president stated that he was aware of it and that they had lowered rates to 19.8% accordingly. There is competition in this regard.”
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