Turkey eyes new tax revenues from high earners, other measures

Credit: REUTERS/MURAD SEZER

Turkey plans to raise tax revenues with a series of measures including higher rates for high earners and high-value properties, hotel accommodation, and digital services such as advertising, according to an outline obtained by Reuters.

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ISTANBUL, Oct 24 (Reuters) - Turkey plans to raise tax revenues with a series of measures including higher rates for high earners and high-value properties, hotel accommodation, and digital services such as advertising, according to an outline obtained by Reuters.

The draft would also raise a sales tax on foreign exchange and give President Tayyip Erdogan the authority to raise it further, while lowering taxes for publicly-listed companies.

The number of Turkish income tax brackets would rise to seven from four. The changes would "aim to take more tax from high earning groups," the outline said.

In July, sources familiar with the matter told Reuters the government had decided to postpone until October planned tax rises for high earners and ultra-luxury housing sales.

Dunya newspaper said the new tax law draft was expected to be presented to parliament this week. Corporate tax, excluding for financial institutions, is to be cut to 18% from a current 22%, with an initial reduction to 20% in 2020, the paper said.

The Treasury and Finance ministry had drawn up the measures in the face of a deterioration in Turkey's budget deficit, which jumped to 85.8 billion lira ($15 billion) in the first nine months of the year from 56.7 billion a year earlier.

Turkey raised a tax on some foreign exchange sales to 0.1% from zero in May in an effort to discourage a months-long trend of Turks selling the then-beleaguered lira. In July, people familiar with the matter said Ankara planned to double the tax.

($1 = 5.7323 liras)

(Reporting by Ebru Tuncay and Nevzat Devranoglu; Writing by Daren Butler; Editing by Jonathan Spicer)

((jonathan.spicer@reuters.com; Reuters Messaging: jonathan.spicer.thomsonreuters.com@reuters.net @jonathanspicer))

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