According to the VAT Law, the general VAT rate was 18%, and for some goods and services, two different discounted VAT rates (1% and 8%) were applied.
I. 1% for deliveries and services in the numbered list,
II. 8% for deliveries and services in the numbered list,
An 18% rate was applied for transactions other than List 1 and 2.
Monday February February 14, 2022, VAT rates of 8% were reduced to 1% by the Presidential Decree published in the Official Gazette dated February 13, 2022, however, after the President announced on February 12, 2022 that the VAT rate of 8% on basic foodstuffs would be reduced to 1% under the “Simplification of the VAT System Program”.
With this amendment, it was made by taking foodstuffs from list II to list I, and taxpayers who charged 8% VAT before the discount will only charge 1% VAT after the discount.
This means that it will not be able to eliminate the VAT it has been loaded even as much as before, that is, the demand for VAT refund will increase, and it has become mandatory that the decision to discount is supported by a faster VAT refund system for those who sell these goods.
As for these taxpayers, they must comply with Article 29/2 of the VAT Law No. 3065. in accordance with the article, they must apply for a reduced rate VAT refund and receive the VAT they are charged in cash or offset.
The VAT, Stamp Duty and Tax Procedure Law applied in our country are laws prepared many years ago.
The time has long come for our country to implement a NEW TAX SYSTEM.
The developments in computer systems, INTERNET APPLICATIONS, the increase in the International Dimension of Trade and the strengthening of our Country’s Position in the GLOBAL VILLAGE REQUIRE radical adjustments to be made in the TAX LAWS.
SHORTCOMINGS OF THE CURRENT VAT LAW
The current VAT Law is both a 3-rate law of 1%, 8%, 18% as a rate, and a Tax accrued on an Accrual basis. Most of the tax is levied from the 18% product group, and due to the Tax Deduction mechanism, it increases the use of false or misleading documents by taxpayers due to their content, informality. Finance is also making an effort to reduce audits through honest taxpayers to reduce informality. In addition, the Tax is paid as soon as the invoice or document is issued without receiving the income of the goods or services, and the debt is accrued before the sale price passes into the hands of the Taxpayers who sell the Term, making it difficult for taxpayers and generating tax debt. This system has been a burden on businesses in the country’s economy for many years, and businesses therefore avoid paying bills or issuing documents, fueling the informal economy.
OUR PROPOSAL FOR REVISION OF THE VAT LAW
In Our Opinion, VAT. The calculation of a VAT of 18% on the income tax threatens the sustainability of the activities of employers’ enterprises. VAT needs to be REHABILITATED rather than abolished.
In our opinion, we propose to ABOLISH the Mechanism of DISCOUNTS on VAT for Rehebilitation. We also recommend Reducing the VAT Rate to 1%. It is necessary that this Tax paid can be written off on Costs or Expenses. Thus, All businesses that sell every 100 TL will pay 1 TL as VAT to the State. Thus, both ALL Taxpayers will pay 1% Tax on their income, and there will be no REFUND of VAT to Taxpayers. Thus, there will be no money left from the Country’s Coffers.
With this Reform change in the VAT System, VAT TAX will be levied on 1% of our Country’s Gross Sales. at the end of 2021, 7 trillion 588 billion 917 million TL will be at a nominal GDP level of 7 trillion 588 billion 917 Million TL 75 Billion 889 Million TL, which is 1% of the 7 trillion 889 Million TL 6 Billion 324 Million TL VAT Revenues will be generated every month.
Thus, Taxpayers will know that they have a 1% VAT burden for every 100 TL sale in the Calculation of the Tax Burden, and they will not tolerate illegal transactions such as unregistered purchases or fake invoices. Besides, Taxpayers will cut their bills regularly.
We know that Arica VAT Tax is both negotiable and a profit element on Taxpayers and Consumers. If VAT were a low-rate tax, for example, 1%, and all taxpayers paid it on their income, it would not impose an equal burden on all taxpayers, and each taxpayer would have paid VAT in proportion to their income.
Considering the economic and technological developments in the world, their distance to one of the countries has been shortened. Therefore, it is necessary to regulate Tax Systems in parallel with changing technologies and economies. many changes have been made to the VAT Law and Other Tax Law, the foundations of which were laid in the 1980s during the late Adnan Kahveci’s time. But no radical changes have been foreseen and made.
In our opinion, by abolishing the Mechanism for Deducting VAT Tax and reducing its rate to 1%, it will be ensured that the taxpayer will have a Tax Contribution to his state at the rate of 1% of his turnover. In addition, the time has come and gone for all Taxpayers to use INVOICES in Document Layout and keep their Books in the form of E-BOOKS on a BALANCE SHEET basis.
Ahmet GÜNDÜZ – YMM