The bad situation in the economy in Turkey is getting deeper. The main reason for increasing inflation, decreasing purchasing power of households and record increases in exchange rates is our country's distorted economic policies. In particular, the imbalance in the tax system victimizes almost everyone, from employers to employees.
We talked about Turkey's informal economy with Economist Prof. Dr. Osman Altuğ, one of the architects of the Pool System, the biggest step taken by Milli Görüş leader Necmettin Erbakan in the field of economy.
Osman Altuğ made important evaluations, stating that the economic problems are largely due to the informal economy and the tax system related to it.
“EVERYONE SHOULD BE TAXED PROPORTIONALLY”
Economist Osman Altuğ, drawing attention to the basic problem in the economy, "Türkiye is trying to develop with a free market economy. In other words, it is aimed to provide employment and development with the private sector. However, the free market economy in our country is not a system that is carried out legitimately. Because there is an unregistered economy in Turkey. The tax system is seriously flawed. Since not every segment of our country is properly taxed, a system has emerged that puts the burden on taxpayers. There is a logic such as taxing less on those who earn less, and more on those who earn more. This is also wrong, everyone should be taxed proportionately. If this is not the case, the legitimacy of the tax system becomes a matter of debate. It is not possible to talk about a legitimate tax system in Turkey anyway. For example, the issue of social security premiums. Nowhere in the world is a 36 percent social security premium collected from the employer. For example, income tax reaches 50 percent. SCT, VAT etc. Then, a strange tax system was established throughout the country," Altuğ said.
“A PROPER TAX SYSTEM MUST BE CREATED”
Osman Altuğ stated that it is not implemented according to the rules of the free market economy.
"For the economic system in Turkey to function properly, a proper tax system must be established. How will this happen? We need to register the informal economy. As a prerequisite for our entry into the European Union (EU), the informal economy must be registered. It has not been accepted because Türkiye has not been able to meet this condition for years. In other words, the reason why we were admitted to the EU is not because we are a Muslim country. The Turkish economy has always developed informally since the first day it was founded. American and European countries have good economic systems because they can register their economies and establish a proper tax system accordingly," Altuğ said.
“TAX SYSTEM IS DISTORTED IN THE UNREGISTERED ECONOMY”
Osman Altuğ, touching on the reasons for the informal economy, said, "The main problem of the tax system in Turkey is that taxes are collected from expenses, not income. But in our country, citizens are income citizens. Our people should be taxed on their real income. This causes the formation of the informal economy. This causes such a big problem that Turkey does not even know exactly how much it owes to whom and how much interest it pays to whom. It's a confusing situation. We are a so-called Muslim country, but we do not care at all about the economy predicted by Islam. The West fits the economic model of Islam more than us. According to Islamic economics, the first condition is registration. There is no informal economy in Islam. In the informal economy, the tax system is corrupted and this time the system constantly runs a deficit."
“THE WEST HAS IMPLEMENTED ISLAMIC ECONOMY MORE THAN US”
"If the tax system is corrupt, a rebellion against the system will begin. The customer does not receive an invoice to avoid paying VAT, and the seller does not issue an invoice to avoid paying income tax. The corrupt tax system forces citizens to do this. Nowhere in the world is this much tax collected. Therefore, the system becomes even more corrupt. In this case, tax revenue does not cover our expenses and the tire goes flat. In order for the system to progress properly, we must comply with the principles of Islamic economics. Islamic economics has two basic principles. One record, two qualities. In other words, according to our religion, the economy will be registered and qualified people will manage the economy. But we don't have this. If you register the economy and put it under the management of competent people, then there will be no problem. The West implemented Islamic economics more than we did. They also now attract attention with their strong economies," Altuğ said and pointed out how to solve the problems in the economy.