Turkey is gearing up to introduce new taxes, including a 0.03% transaction tax on cryptocurrency trading. This move is part of a significant fiscal overhaul aimed at addressing the country’s budget deficit, which has been exacerbated by the earthquakes in 2023. The new approach also signifies a shift in the regulation of financial transactions.
Proposed Crypto Transaction Tax
According to Bloomberg, the Turkish government is considering a 0.03% tax on cryptocurrency transactions. This tax is expected to generate substantial revenue during tough economic times. With crypto trading becoming increasingly popular among Turkish investors as a hedge against the weakening lira and high inflation, the proposed tax could bring in approximately 3.7 billion liras annually.
The Turkish government’s overall tax reform plan aims to generate 226 billion liras ($7 billion), which is about 0.7% of the country’s gross domestic product (GDP). Mehmet Simsek, the Minister of Treasury and Finance, has drafted the legislation, which is expected to be discussed in parliament by the end of June. These reforms would mark the largest tax change in Turkey in the past two decades.
Turkey’s Shift in Tax Policy
Despite previously denying plans to tax crypto and stock gains, the Turkish government is now considering targeted transaction taxes to ensure comprehensive financial regulation. On June 5, Simsek stated that Turkey aimed to “leave no area untaxed in order to provide justice and effectiveness in taxation.” Earlier plans for crypto and stock taxation included only “very limited” transaction levies.
President Recep Tayyip Erdogan’s ruling party, which holds a parliamentary majority, is likely to pass the proposed legislation and implement the new 0.03% transaction tax. However, past attempts to introduce transaction taxes have faced significant opposition, and political contention is anticipated in this current effort.
