Are the new tax increases lawful without enacting a supplementary budget?

Click to read the article in Turkish

"The Government takes sides with the capitalists. The laborers would not have such great economic problems even if only the tax exemptions granted to employers were collected."

"It will again be the labor that bears the burden of the budget deficit. But in fact, the government had the chance to do differently."

The above was the initial remarks economist Prof. Aziz Konukman made about the new Value Added Tax (VAT) rates to be applied, published in the Official Gazette today.

With the new decision the VAT is increased to 20 percent for the products for which it was 18 percent, and to 10 percent for the products for which it was 8 percent.

All fees subject to Law number 492 such as the judgment fees, the Notary, the title deed, the consulate, passport, residence permit, work permit, work permit exemption fees, etc. have also been increased by 50 percent.

"The Government is making unauthorized additional spending"

"I want to draw your attention to something else," told Konukman bianet.

"Spending is being made that is beyond what the Parliament has authorized. The President is not presenting a bill to the Parliament, not getting any authorization, but making additional spending. Collecting taxes and spending them without getting authorization for additional spending."

"Of course, this detail has no effect on the fact that the laborers will be bearing the burden even if there is an additional budget. So I am not telling this meaning that we should be asking for a supplementary budget. But this is the procedure that should be followed," he added.

"Erdoğan plays the good cop"

According to Konukman the Justice and Development Party (AKP) can choose to prepare a supplementary budget. And they can take more of the taxes for this additional budget from the wealthy. They can reduce the burden on the poor. They can increase the burden on the employers.

He says, "The second option can be that they can enact a supplementary budget accepting that there will be a budget deficit. So what will happen to the deficit? Either loans or some price rises. The prices of the products that the public sector produces may be increased."

"But the ones who prepare this bill will be the bad cops and the President, who will improve the pensions soon, will be the good cop. The headlines will be saying the President intervened at the last minute and solved the problems of the retired. This is the scenario. There has to be a new scheme for the retired and the President will be the person doing this. As if the other law is being prepared at the Parliament or by the MPs. Not at all!" he adds.

Konukman says that the legislative proposals are being prepared word by word by Erdoğan governments. "The bureaucrats of the single-man regime are preparing the laws, not the MPs," he says.

"Virtual welfare"

Konukman says that the problem will be solved if the government collects only the tax exemptions granted to employers. Then, the new taxes will not be necessary.

"The government chooses to stand by the employers. The choice is being made to the detriment of the laborers. Except only for the motor vehicle tax.

"That one is a wealth tax, but even this is disputable. Why? Almost everyone owns a car. In the same omnibus bill, they are 'giving with spoons and taking away by ladles.' They create virtual welfare and then proceed forward. I call this the art of plucking a goose without the goose yelling. (EMK/PE)