By
Mayowa Adebajo
May 7th, 2024
Although the stock tax remains pending for now, Erdogan and his officials are keen on taxing crypto transactions.
Turkey currently faces a weakened national currency in Lira as its economic woes have been recently compounded by natural disasters such as earthquakes. As the currency is showing no signs of appreciating any time soon, investors may be beginning to look to crypto as their saving grace.
However, there is now a major air of uncertainty around Turkey. In the country’s bid to revive its economy and make revenue by any means necessary, lawmakers are proposing a major tax overhaul. That is, according to a recent Bloomberg report.
This new tax regime is not only the country’s biggest in over two decades, it also includes the nation’s first-ever levy on crypto transactions. This is exactly where issues are arising.
As earlier mentioned, these efforts are geared towards repairing Turkey’s finances which were depleted by last year’s disasters. However, by reaching for crypto, concerns are now being raised that the government may be attempting to stifle innovation. This is especially true if the taxes eventually get too high as many believe it would.
Details of Turkey Crypto Tax Revealed
According to a source with insider knowledge of the matter, the Turkish government is readying itself to shake up the tax system in a big way. The source, who spoke on the condition of anonymity, says the issue is so important that officials are currently drawing up new tax legislation that will be presented for deliberation in parliament later this month.
Turkey plans to put in place measures that will inject an extra 226 billion liras to its GDP, which translates to around $7 billion or 0.7% of the GDP. However, the source claims that the government is hoping to capitalize on the growing crypto adoption to realize a major part of the projected revenue.
The government plans to introduce a 0.03% tax on crypto trading, projected to generate 3.7 billion liras annually. That’s a substantial revenue that authorities see as a major step in the direction of kickstarting the nation’s economic recovery.
Government to Push Ahead Despite Backlash
The tax reform package being proposed by the Erdogan-led administration extends beyond crypto. Although the revenue is expected to help ease the financial situation of the nation, the controversial nature of the tax law is expected to bring in some heat.
Recall that the government initially proposed a tax on stock trading transactions. However, the measure met strong opposition from market participants, causing the government to backtrack. Notably, this presents a potential setback for Turkey’s crypto tax ambitions.
Although the stock tax remains pending for now, Erdogan and his officials are keen on taxing crypto transactions. Even more, the government is determined to regulate the crypto industry.