Türkiye ranks lowest in Europe for tax collection: OECD

Türkiye ranks as Europe’s lowest performer in tax collection, with estimates suggesting the country’s tax collection rate falls about 30% below its potential, according to recent World Bank and OECD data.

Contributing factors include low tax awareness, frequent tax amnesties and a significant informal economy, where nearly 30% of economic activity is off-the-books. This high level of unregistered transactions places Türkiye at the top among OECD countries for tax evasion.

In most developed countries, paying taxes is seen not only as a legal obligation but also as a civic duty and moral responsibility. Nations across Europe and the United States build tax awareness from the early stages of education, creating a culture that strongly discourages tax evasion. Citizens who avoid paying taxes often face social pressure, while tax audits are strict and consistently applied. These structural measures ensure higher compliance, leading to a steady and reliable revenue stream for governments.

Türkiye’s distinctive approach to tax amnesty

Türkiye’s frequent reliance on tax amnesty programs is another unique feature of its tax system. Unlike most OECD countries, where tax amnesties are rare, Türkiye regularly introduces policies that offer tax debt forgiveness. Surveys show that many Turkish citizens postpone or avoid paying taxes in anticipation of future amnesties.

Experts argue that, although these amnesties may temporarily relieve budget shortfalls, they erode long-term tax compliance, weaken taxpayer discipline and frustrate those who regularly fulfill their tax obligations.

In countries like the United States and across the OECD, full tax forgiveness is unusual. While debt restructuring or installment plans are sometimes available, forgiving tax debt outright is rare. Experts warn that Türkiye’s frequent amnesty programs may harm long-term tax discipline, reducing compliance rates and affecting the government’s ability to maintain consistent revenue.

Pathways to better tax compliance in Türkiye

Despite a broader-than-average tax base, Türkiye’s collection challenges prevent it from fully realizing its revenue potential. Experts recommend that Türkiye improve tax education within its school system, reduce reliance on amnesties and enhance auditing mechanisms. These measures could help increase Türkiye’s tax collection efficiency, fostering a more sustainable revenue system and aligning Türkiye’s practices more closely with those of developed economies.