Türkiye fines tobacco giant nearly $200M over irregularities

As part of Minister Mehmet Simsek’s initiative to “tax the wealthy more,” inspectors from the Finance Ministry have imposed a record fine of 6 billion lira on a firm for unregistered revenue.

According to the reports, the Tax Inspection Board is conducting uninterrupted examinations among large taxpayers. Utilizing the “efficiency analysis” method, the Board aims to determine the actual production amounts of businesses by analyzing the materials used in production, other inputs, and the expected products and outputs. This new inspection method has yielded significant results.

In one notable case, efficiency analysis and inventory accounting were conducted for a firm engaged in the production of tobacco products. The analysis considered the capacity and working hours of the cigarette production lines, as well as data on the consumption of natural gas, tobacco, and cigarette filters.

Tax penalty for tobacco firm

The findings revealed that the firm had obtained unregistered revenue. Some documents were not included in the legal book records and declarations, and while invoices were issued for the cigarettes, special consumption and value-added taxes were not reflected in the declarations.

As a result, a tax penalty of approximately 6 billion Turkish liras ( 200$) was imposed on the firm. This amount is expected to increase with interest on arrears. The inspection also uncovered that corporate, special consumption, value-added taxes, and temporary taxes were underpaid.

Finance Minister Mehmet Simsek emphasized the importance of inventory accounting and efficiency analysis in the new inspection work. He noted that tax inspectors have simultaneously launched audits and conducted inventory accounting at 707 jewelers in 9 major cities. “We will continue to implement these types of audit methods in the coming period. New sectors and firms will undergo efficiency analysis and inventory accounting. We will continue our efforts in this direction,” Simsek stated.

Reiterating his message of “taxing the wealthy more,” Simsek added:

“In this context, we are closely monitoring our large taxpayers. Our audits will continue to increase, covering all sectors. We are determined to enhance tax justice by preventing unregistered activities. We will direct the improvements in tax revenues to efficient areas for the welfare of our citizens and the stability of our country. We will continue to track those who cause tax losses and evasion, leading to unjust gains and unfair competition.”