Tax Policy and Informal Economy

In today’s economies; tax policy is made use of both in the finance of the state’s basic duties and in the framework of the “broadening fiscal policy” with the aim of achieving full employment economies. The fundamental principle is for the tax policy to not disrupt the “relative price structure” foreseen by the competitive market economy. The average tax rate needs to be the product of an understanding that finances a public service focused only on its fundamental duties (public order, national security, local administrations, inspection etc.). At all events the tax legislation should be brief, comprehensible, as clarified from gray areas as possible; tax auditing should be in the form of a regulatory institution and operate according to such an understanding, transparent and accountable. The tax rate should on the one hand pursue the goal of seeing to the public service while not triggering tax evasion and informal economy. Struggling with informal economy is of the essence when it comes to productivity and competitiveness. In economies that do not wage a struggle against informal economy in full; becoming distant from productivity and competitiveness environment and, at the final stage, from sustainable growth environment is in question.

TÜSİAD Economic and Financial Affairs Committee
Taxation Working Group
Fight Against Informal Economy Working Group