The new tax law was passed by the Planning and Budget Committee.

The Planning and Budget Committee convened under the chairmanship of AKP Samsun Deputy Mehmet Muş. The committee discussed today the "Proposal for Amendments to Tax Laws, Certain Laws, and Statutory Decree No. 631," which the AKP submitted to the Turkish Grand National Assembly last Friday.

The bill's articles were combined and discussed according to regulations containing the same law. According to the first article of the bill, the general exemption for residential rental income earned within a calendar year will be abolished. This exemption will be revised only for those receiving retirement, disability, widow, and orphan pensions from social security institutions established by law. Opposition MPs raised questions about the article's "unconstitutionality" and "inflation calculation."

AKP İzmir Deputy Yaşar Kırkpınar asked whether an impact analysis had been conducted regarding the article regulating the removal of the general exemption for residential rental income.

Bayrakdar: 1.4 million people will be included in the scope, but 500 thousand people will not be included.

Revenue Administration President Bekir Bayrakdar, regarding the removal of the exemption for residences, explained, "The point I want to address is this: there are also retired manufacturers, namely wealthy individuals. It was said they would also benefit. The law currently stands: if your annual income exceeds 1.2 million, you can't benefit from the imputation. In other words, those with a higher income aren't eligible for the imputation. If you have less than that income and are also retired, there are around 500,000 people with an income significantly less than that. You're a retiree, and there are 500,000 people renting your house. Therefore, 1.4 million people will be covered, and 500,000 will not, and they will benefit from the imputation. Those with very substantial incomes aren't eligible for these jobs either. However, other issues include how the inflation effect will be fully reflected, and how it will be reflected is a separate matter."

HATİPOĞLU: WE DO NOT CONSIDER THAT IT WILL REFLECT THE RENT

Deputy Minister of Treasury and Finance İsmail İlhan Hatipoğlu also responded to discussions on whether the article would increase rents long-term and violate the constitutional principle of equality. Hatipoğlu stated that citizens with an annual income exceeding 1.2 million lira would not be eligible for this exemption, saying, "On the other hand, the issue of rent increases is, of course, important. The housing crisis continues, and we are sensitive to preventing rent increases from escalating further, but rent increases already have a ceiling set by the average of the Producer Price Index (PPI) and the Consumer Price Index (CPI). They will be increased within that framework. Therefore, we do not assess whether this will affect rents. Ultimately, we are introducing objective criteria regarding whether it violates the constitution."

Hatipoğlu emphasized that an exception was defined based on objective criteria for those with a retirement income not exceeding 1.2 million, and said, "The matter should be evaluated according to the Constitution, but we do not technically consider it to be unconstitutional."

REGULATIONS ON INTEREST PAYMENTS AND NOTARY FEES IN REAL ESTATE WILL BE RE-REFERRED TO THE GENERAL ASSEMBLY

Article 2 of the bill will reduce the difference in the tax advantage for deducting interest paid on properties purchased with loans and those rented out. Due to criticism that this provision would lead to income inequality, it was requested that it be updated and introduced during the General Assembly discussions.

With the regulation regarding the collection of proportional notary fees in new and second-hand vehicle transactions included in Article 8 of the proposal, a proportional notary fee will be collected from the initial registration of new vehicles and second-hand vehicle sales/transfer transactions carried out at notaries, based on the sales price and not less than the minimum fixed fee.

Serdar Arat, President of the Turkish Notaries Association, recalled last year's regulation that allowed notary fees to be paid by credit card, including taxes, and stated that banks were charging commissions for credit card collections. Arat noted that increasing notary fees could lead to problems with banks regarding credit card limits, and expressed his views on reducing credit card collection times to a more reasonable timeframe or waiving commission fees.

HATIPOGLU: WE DON'T THINK IT WILL IMPOSE A HUGE BURDEN

Deputy Minister of Treasury and Finance İsmail İlhan Hatipoğlu, responding to criticism of the notary fee, said, "We abolished the vehicle purchase tax when the Special Consumption Tax (SCT) was introduced in 2002, but we abolished the sales tax in 2008. It has now been reevaluated within the framework of budgetary needs. We do not believe it will create a significant burden. It is a regulation that will increase based on the value of the vehicle and ensure fairness. We also propose a tax rate of 0.2 per thousand." Commission Chairman Muş decided to revise the article in response to criticism and revise it in the General Assembly.

The Urban Transformation Presidency's Domestic Borrowing Period Has Been Shortened

The opposition group, citing the 31st article of the proposal, which extends the Urban Transformation Directorate's domestic borrowing authority until 2029, demanded a shortened period. Addressing Urban Transformation Directorate bureaucrats and the Ministry of Treasury and Finance bureaucrats, Commission Chair Muş suggested, "There will be no extension until 2029. If it's shorter, you can continue your work. The Treasury can allocate a sufficient budget for you during this period."

AKP Konya Deputy Orhan Erdem and AKP Adıyaman Deputy Resul Kurt submitted a motion to change the term "December 31, 2029" to "December 31, 2027" in Article 31 of the Urban Transformation Presidency and Domestic Borrowing Authority. The motion was approved by a majority vote in the commission. Commission Chair Muş said, "We are granting this authority so as not to extend it again. Do not request such authority from parliament again."

The President will have the authority to add funds to Treasury aid for businesses in the manufacturing industry.

AKP Konya Deputy Orhan Adem, AKP Yozgat Deputy Süleyman Şahan, and AKP Adıyaman Deputy Resul Kurt submitted five different motions after discussing the proposal articles.

A motion was submitted regarding water meters with expired stamps, as stipulated in the Measurements and Calibration Law. The amendment to the law will include the provision that "meters will not be seized and their ownership transferred to the public, and administrative fines will not be imposed. Those already issued will not be notified, collection of those already notified will be waived. The court will decide that there is no need to issue a decision on any existing lawsuits. The parties will be responsible for litigation and legal proceedings, and attorney fees will not be awarded."

With the article added to Unemployment Insurance Law No. 4447, the President will be authorized to add funds to the relevant administrative budgets of businesses operating in the manufacturing industry, in conjunction with treasury aid when necessary, in order to protect and increase employment in these sectors.

The temporary 23rd article of the Real Estate Tax Law has been repealed. In the Decree Law No. 635 on the Funding of Research, Development, Innovation and Entrepreneurship Activities of the Ministry of Industry and Technology, regulations were made to enable businesses to take structural development steps such as capacity building, creating economies of scale, increasing productivity, and to ensure business sustainability in variable market conditions.

In addition, regulations were made regarding the effective date of the articles included in the bill.

Source: ANKA