New income tax law ready in two months

ISTANBUL - Hürriyet Daily News

The Finance Ministry is working on a draft law on income tax, says Minister Şimşek, who has warned earlier that the budget balance deteriorated in the first half. AA photo

A study on a draft law on income tax will be discussed by the Economic Coordination Committee in two months, before being submitted to the Cabinet, Finance Minister Mehmet Şimşek said yesterday in the southeastern province of Batman, according to the Anatolia news agency. Şimşek had earlier this month signaled changes to the tax regime.

Noting that the studies on the Draft Income Tax Law were in the final phase, he said the studies would continue through the summer and that the new law would focus on budget discipline.

“We are in an attitude to preserve financial discipline to prevent budget variance for 2012 ... But naturally we cannot control external economic factors. The global economy is slowing and there has been an increase in spending beyond our control,” Şimşek said, adding that the ministry was also working on the national budget for 2013.Şimşek had said July 16 that additional taxes may be imposed if necessary as the budget balance had deteriorated “seriously” during the first half of the year.

Turkey registered a budget deficit of 6.7 billion Turkish Liras in the first six months of the year, 6.3 billion liras of which was recorded only in June. Budget revenue rose 11 percent in the first half of 2012 to 162.2 billion liras compared with same period last year.

Tax revenue increased 6.9 percent. However, the increase in budget revenue was 20.7 percent and in tax revenue 24.4 percent in the same period last year.The government will do whatever is necessary to collect tax, Şimşek said. “We will clamp down on the informal economy and take necessary steps regarding collecting accrued tax,” he said.