For a while in Turkey, the application called Esel Mobile System (EMS) has been continued. This application, which directly affects the wallets of citizens who buy fuel, is based on the state’s abandonment of SCT in order to keep prices at a certain level. In other words, the price increase that should be reflected in the fuel is not covered by the SCT and reflected to the pump thanks to the EMS, and it does not come out of the pocket of the citizen. However, the statements made on the subject reveal that this practice is no longer sustainable. However, if the EMS is abandoned, the fuel may increase by 2.5-3 TL in an instant.
Nazmi Karyağdı, Head of Revenue Administration’s Strategy Development Department, announced that the process at EMS has come to an end in an interview with Dünya. Because the EMS, which was put into practice to prevent fuel-induced inflation, almost zeroed the SCT taken from fuel. Stating that the system works, but there is no SCT left to be ruled out anymore, Karyağdı says that the government is looking for resources on this issue, but the work done so far is temporary.
“Temporary solutions have devastating effects”
According to Nazmi Karyağdı, the government limited financing expenses by increasing the SCT on alcohol and tobacco products; It tried to create a source for the SCT deficit in fuel by increasing the corporate tax rate to 25 percent and ensuring that 70 percent of vehicle expenses are recorded as expenses. In other words, it was ensured that the decreased tax revenues from one side were met by the other parties. Expressing that this would be a temporary solution, however, Karyagdı, Head of the Revenue Administration E. Strategy Development Department, stated that the impact of such solutions would be permanent and devastating. Of course, this situation will hurt ordinary citizens like us even more. . .
Expressing the new problem in front of Turkey that will directly affect our lives, the authorized person also offered some solutions for this problem. At the forefront of these proposals is a new tax system, as can be expected. According to Karyağdı, a fair tax system should be introduced both in terms of regulation and implementation. However, it is not possible to say for now whether such a thing will happen or not. . .
What do the numbers say?
Nazmi Karyağdı also explained the point reached in fuel oil with figures. Reminding that Turkey was once the country that received the highest tax from fuel, Karyağdı said that in 2005, 75 percent of the price of unleaded gasoline and 65.09 percent of the price of diesel were taxed. However, according to the latest data, Turkey now receives the world’s lowest taxes on fuel. So much so that today only 27.24 percent of the gasoline price (including SCT, VAT and other items) is paid as tax. This rate is 56.87 percent in the European Union.
Stating that the state’s SCT revenue on fuel has decreased significantly since the implementation of the EMS, Nazmi Karyağdı stated that SCT revenues decreased even in the period when the TL appreciated. In this context; While the state earned 65 billion 622 million lira SCT revenue from fuel in 2017, 55 billion 593 billion liras were taken as SCT in 2018, that is, in the period when the TL was appreciated compared to the previous year. The amount of revenue, which reached 69 billion liras in 2020, was recorded as only 26 billion 178 million liras in the January-September period of 2021. . .
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