Turkey is gearing up to implement new taxes, including a 0.03% transaction tax on cryptocurrency trading, as part of a broad fiscal reform.
This initiative is designed to tackle the budget deficit exacerbated by the 2023 earthquakes and signifies a new direction in regulating financial transactions.
A Bloomberg report highlighted the proposed changes, noting that the cryptocurrency transaction tax could significantly bolster the economy:
“The ministry is considering a 0.03% transaction tax on crypto trading, which has become popular among retail Turkish investors seeking a hedge against lira weakness and rampant inflation.
The move would bring in 3.7 billion liras a year, according to official projections.”
The Turkish government’s proposed tax reforms are projected to generate 226 billion liras ($7 billion), approximately 0.7% of the country’s gross domestic product.
The Ministry of Treasury and Finance, under Mehmet Simsek, has prepared legislation for parliamentary review by the end of June.
The 0.03% transaction tax aims to leverage the increasing popularity of crypto trading among Turkish investors who use it as a hedge against inflation and currency depreciation.
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This reform represents the most significant tax change in Turkey in the past twenty years.
Despite earlier denials of plans to tax crypto and stock gains, the Turkish government is now considering specific transaction taxes to ensure comprehensive financial regulation.
On June 5, Simsek stated that Turkey intended to “leave no area untaxed in order to provide justice and effectiveness in taxation.”
Previous plans to impose taxes on crypto and stock gains were dismissed, with only “very limited” transaction levies suggested.
However, the new proposals reflect a shift towards more extensive taxation.
President Recep Tayyip Erdogan’s ruling party, which has a parliamentary majority, is expected to pass the proposed legislation, including the 0.03% transaction tax.
Despite this, previous attempts to introduce transaction taxes have met with significant opposition, and similar political contention is anticipated this time around.
Overall, these measures mark a significant shift in Turkey’s financial policy landscape, aiming to address economic challenges and improve the effectiveness of the tax system.
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