Treasury and Finance Ministry intensifies tax justice efforts, high-spenders under scrutiny
A general view of the financial and commercial Levent neighborhood, where many of the leading banks and companies have their headquarters, in Istanbul, Türkiye, Aug. 16, 2018. (AP Photo)
The Treasury and Finance Ministry’s Tax Inspection Board (VDK), under the directive of Finance Minister Mehmet Simsek, continues its rigorous efforts to enhance tax fairness and efficiency.
Simsek’s commitment to increasing tax equity and reducing the informal economy is clear, as he emphasized on social media: “We will take more taxes from those who earn more. By combating the unregistered economy, we are improving budget financing.”
Targeting high-spenders
VDK has placed individuals with monthly expenditures exceeding ₺5 million, who have not declared any income, under its inspection.
“Businesses that collect payments via IBAN or mail order methods but evade tax payments are also being scrutinized. We will continue to pursue those who cause tax losses and create unfair competition,” Simsek noted.
- Scope of investigation: The board has identified 800 individuals with monthly expenditures over ₺5 million, indulging in luxury consumption but not declaring income or tax obligations.
- High expenditures: Some of these individuals have monthly expenses reaching ₺10 million. The source of their income will be identified and taxed accordingly.
Scrutinizing IBAN transactions
VDK is also closely monitoring businesses directing customers to pay via IBAN without issuing receipts or invoices.
- Verification: Tax inspectors are questioning IBAN account holders to determine the source of their income.
- Legal implications: During the investigation, account holders are informed that allowing others to use their accounts is a crime under the Law on the Prevention of Laundering Proceeds of Crime.
Initial findings indicate that those facilitating collections via IBAN accounts are often company partners, employees, or close associates of the taxpayers. Investigations into those using alternative collection methods to evade taxes will continue.
Accurate information from those questioned is crucial to avoid legal complications.
Investigating ‘mail order’ method
The board is also examining the “mail order” payment method, frequently used in sectors like services, e-commerce, and furniture because of the impracticality of physical payments and the need for installment options.
- Tax risks: Payments made through this method are monitored for potential tax risks.
- Compliance: VDK is ensuring that invoices or receipts are issued for goods or services sold via the mail order method.
