The Confederation of Civil Servants’ Unions (Memur-Sen) published a report titled ‘Fair, Reasonable and Sustainable Tax System’, which includes solution proposals for the tax system.
Civil Servant-Sen Confederation announced the report titled ‘Fair, Reasonable and Sustainable Tax System’ at a press conference. Speaking at the press conference, Hacı Bayram Tonbul, Deputy Chairman of Memur-Sen, pointed out that tax justice is a matter of social justice and said, “It is clear that there can be no social peace and justice without tax justice. However, the center of gravity of the current tax system in our country is the taxation of the whole society instead of taxation according to income. Through indirect taxes, which constitute the center of gravity of our tax system, the whole society is taxed whether they have income or not, especially those on fixed incomes. As a result of neoliberal policies, taxation regardless of income, even for the most basic needs such as medicine, water, bread and baby food, is not only inhumane/unfair, but also unfair in the sense that taxation regardless of income causes the rich and the poor to pay the same tax.”
Emphasizing that the increase in income tax more than the increase in income reduces the purchasing power, Tonbul said, “For example, let’s assume that the salary-wage increases of public servants are increased by 20 percent. Since the tax exemption in the minimum wage amount will remain constant, the increase will be eroded both by inflation and by entering the 20 percent and 27 percent income tax brackets depending on the base increase. Although income seems to increase, more than the increase in income will be taken before it is received.”
“A fair and effective tax system is only possible with the implementation of a holistic tax policy”
Stating that fair taxation should primarily aim for a taxation proportionate to financial power, Tonbul said, “It requires taxing those who earn more and those who earn less, taxing everyone according to their earnings, taxing income from labor at a lower rate than the same amount of income from capital, exempting the minimum wage from income tax, progressive taxation, taking into account the status of people such as marital status, disability and old age, and other principles that ensure justice. As a matter of fact, a fair and effective tax system that will strengthen development and growth policies, increase employment and exports, and not become a burden on the budgets of fixed income earners who are struggling to make ends meet is possible with the implementation of a holistic tax policy that considers all areas of life.”
Pointing out that the tax system proposal reports propose a new generation tax architecture with a macro policy framework, Tonbul said, “As we argue in the report, tax justice is possible by reducing the tax burden on large segments of society, of which fixed income earners constitute the vast majority, and by establishing taxation according to income status.”
“The share of direct taxes in tax revenue should be increased and the share of indirect taxes should be reduced”
Tonbul listed the prominent suggestions in their report as follows:
“The share of direct taxes in tax revenue should be increased and the share of indirect taxes should be reduced. Exemptions, amnesties and similar practices in corporate tax, which cause a decrease in direct taxes and an increase in indirect taxes, should be terminated. Efficiency in tax collection should be increased, tax losses and evasion should be prevented and informality should be prevented by establishing a holistic and complementary structure. The informal economy, tax evasion and tax fraud, which cause a decline in tax revenues, should be combated more effectively. Necessary consumption and necessity products should be excluded from SCT/VAT. VAT and SCT should be updated according to current economic conditions and rates should be reduced. The base for income tax on wages should be increased in line with economic conditions. Income tax brackets levied on wage earners, especially public servants, should be revised as 5, 10, 15 percent. Stamp tax deducted from wages should be abolished.”
Tonbul stated that they believe that the report will make important contributions to the improvements needed by the tax system and to the establishment of tax justice. After Tonbul’s speech, the meeting continued with the presentation of Prof. Dr. Mustafa Çolak, who prepared the report.
