Interdisciplinary Public Finance, Business and Economics Studies - Volume II
Table Of Contents
- Title Page
- Copyright Page
- About the editor
- About the book
- Citability of the eBook
- List of Contributors
- Evaluation of Agricultural Sector in Turkey Within Income Tax1
- The Relationship Between Income Inequality and Access to Technology: The Case of Turkey1
- Coordination Issue Between Monetary and Fiscal Policies: Case of Turkey in the Context of Interaction Between Fiscal Discipline and Price Stability
- Costs to the Developing Country Economies of FED and ECB Monetary Policy Decisions (Turkey Example)
- The Relationship Between R&D Expenditures, High-Technology Export and Economic Growth: The Case of OECD Countries
- The Relationship Between Political Stability, Fixed Capital, Employment, and Economic Growth: An Analysis on MENA Countries
- The Blue Economy in Turkey
- Edirne’s Industry in the Early Years of the Republic
- A Study on Debt Sustainability in Fragile Five: Brazil, Turkey, India, Indonesia, and South Africa; Analysis with Fourier Approach
- After EU Enlargement: Development or Deterioration
- Credits and Credit Analysis in Banking Sector
- Fundamentals of Sample Survey Research: A Statistical Perspective
- A Solution Proposal for Car Parking Problems in Cities: “Neighbourhood Car Parking Cooperatives”
- Strategic Cost Management Process
- Liquidity Management Performance of Major International Airline Companies1
- Reporting Key Audit Matters Within the Independent Audit’s Report
- An Investigation on the Determination of Financial Literacy Level
- Strategic Management Accounting Practices from Marketing Perspective
- Effect of Corporate Governance on Market and Accounting Based Performance Measures: An Investigation in Borsa Istanbul
- The Perspectives of the School of Applied Sciences Students to the Accounting Ethics: The Case of Kırklareli University School of Applied Sciences
- Industry 4.0 Awareness of Manufacturing Sector in Konya Province
- The Role of Innovative Human Capital (IHC) for Organizations
- The Mediating Role of Work Stress on the Effects of Leader-Member Exchange on Turnover Intention
- Digital Marketing: A Conceptual Framework
- The Role of Human Resource Management, Leadership, and Marketing in Employer Brand
- The Evolution of Social Commerce
- Local Tourism Entrepreneurship and Entrepreneurial Climate: The Case of İğneada, Kırklareli
- List of Figures
- List of Tables
Ph.D., Assistant Professor, Osmaniye Korkut Ata University, Faculty of Economics and Administrative Sciences, Department of International Trade and Logistics, email@example.com
Berna Ak Bingul
Ph.D., Assistant Professor, Kırklareli University, The School of Applied Science, Department of Banking and Finance, firstname.lastname@example.org.
Ph.D., Assistant Professor, Kırklareli University, Faculty of Tourism, Department of Tourism Management, email@example.com
Ph.D., Assistant Professor, Kutahya Dumlupınar University, Kutahya Vocational School of Social Sciences, Department of Accounting and Tax Applications, firstname.lastname@example.org
Research Assistant, Alanya Alaaddin Keykubat University, Department of Management Engineering, email@example.com
Fusun Celebi Boz
Ph.D., Assistant Professor, Bayburt University, Faculty of Economics and Administrative Sciences, Department of Economics, firstname.lastname@example.org
Kırklareli University, Kırklareli University, School of Applied Sciences, Department of Banking and Finance, email@example.com
Ph.D., Assistant Professor, Kırklareli University, Social Sciences Vocational School, firstname.lastname@example.org
Ph.D., Student, Tekirdağ Namık Kemal University, Institute of Social Sciences, Economics, email@example.com
Ph.D., Assistant Professor, Kırklareli University, School of Applied Sciences, Department of Accounting and Financial Management, firstname.lastname@example.org
Ph.D., Anadolu University, Faculty of Business Administration, Department of Hospitality Management, email@example.com
Yavuz Selim Duger
Ph.D., Assistant Professor, Kütahya Dumlupınar University, Faculty of Economics and Administrative Sciences, Department of International Trade and Finance, firstname.lastname@example.org
Ph.D., Assistant Professor, Kırklareli University, Luleburgaz Vocational School Department of History, email@example.com
Ph.D., Assistant Professor, Kutahya Dumlupinar University, Faculty of Economics and Administrative Sciences, Department of International Trade and Finance, firstname.lastname@example.org
Ph.D., Assistant Professor, Ordu University, Faculty of Economics and Administrative Sciences, Department of Economics, email@example.com.
Ph.D., Assistant Professor, Kütahya Dumlupınar University, Faculty of Economics and Administrative Sciences, Department of International Trade and Finance, firstname.lastname@example.org
Ph.D., Assistant Professor, Kütahya Dumlupinar University, Hisarcik Vocational School, Department of Business Management, email@example.com
Imam Bakir Kanli
Ph.D., Associate Professor, Marmara University, Department of Political Science and Public Administration, firstname.lastname@example.org
Ph.D., Assistant Professor, Gaziantep University, Faculty of Economics and Administrative Sciences, Department of Business, email@example.com
Ph.D., Assistant Professor, Turkish Aeronautical University, firstname.lastname@example.org
Ph.D., Assistant Professor, Nişantaşı University, School of Applied Sciences, Department of Logistic, email@example.com
Esra N. Kilci
Ph.D., Assistant Professor, Istanbul Arel University, Faculty of Economics and Administrative Sciences, Department of International Trade and Finance, firstname.lastname@example.org
Lecturer, Kırklareli University, Luleburgaz Vocational School, Department of Computer Technology, email@example.com
Ph.D., Assistant Professor, Bursa Uludag University, Faculty of Economics and Administrative Sciences, Department of Public Finance, firstname.lastname@example.org
Ph.D., Assistant Professor, Giresun University, Görele School of Applied Science, Department of Transport and Logistics, email@example.com
Berna Dombekci Ozcelik
Ph.D., Assistant Professor, Kırklareli University, Social Sciences Vocational School, Accounting Program, firstname.lastname@example.org
Ph.D., Professor, Tekirdağ Namık Kemal University, Faculty of Economics and Administrative Sciences, Department of Economics, email@example.com
Ph.D., Assistant Professor, Eskisehir Osmangazi University, Faculty of Economics and Administrative Sciences, Department of Economics, firstname.lastname@example.org
Ph.D., Associate Professor, Aydın Adnan Menderes University, Nazilli Faculty of Economics and Administrative Sciences, Department of Business Administration, email@example.com
Ph.D., Research Assistant, Kutahya Dumlupinar University, Faculty of Economics and Administrative Sciences, Department of International Trade and Finance, firstname.lastname@example.org
Ph.D., Assistant Professor, Bandırma Onyedi Eylül University, Faculty of Economic and Administrative Sciences, Department of Economics, email@example.com.
Ph.D., Assistant Professor, Bursa Uludağ University, Faculty of Economics and Administrative Sciences, Department of Econometrics, firstname.lastname@example.org.
Ph.D., Assistant Professor, Giresun University, Görele School of Applied Sciences, Department of Banking and Finance, email@example.com
Ph.D., Associate Professor, Kutahya Dumlupinar University, School of Applied Sciences, Department of Accounting, firstname.lastname@example.org
Ph.D., Associate Professor, Kutahya Dumlupinar University, School of Applied Sciences, Department of Accounting, email@example.com
As countries develop, the share of agricultural sector in domestic income has begun to reduce along with the increasing industrialization. According to the data of 2017, in Turkey the share of agriculture in domestic income is 6,1 %, and it is still in a considerable amount. However, the share of agricultural sector in employment is 19,4 % and this is a very high rate. Today, one out of every five people works in agricultural sector. Therefore, it can be thought that there is a serious tax potential in agricultural sector.
Income tax is a type of tax collected on the incomes of real persons. In Turkish Income Tax System, income is defined in 1st article of Income Tax Law (ITL) numbered 193. Accordingly, income is the net amount of incomes and revenues that a real person obtains in a calendar year. The incomes and revenues that will be subject to annual income tax consist of the income items in 2nd Article of ITL. These related items are business incomes, agricultural incomes, wages, self-employment incomes, real property incomes, movable assets incomes and other incomes and earnings. Income tax is a tax based on declaration. The unitary structure of Turkish Income Tax System necessitates the declaration and taxation of agricultural incomes based on real taxation by gathering in annual declaration along with the incomes obtained from the seven income items mentioned above. However, stoppage at source was adopted as the main principle in taxation of agricultural incomes in Turkey. But stoppage at source is against the essence of unitary income taxation system.
The role of income tax in taxation of agricultural sector is emphasized first and then the taxation of agricultural sector in Turkey within income tax is analyzed and evaluated in this study, which aims to analyze and evaluate the taxation of agricultural sector within income tax.←15 | 16→
2 The Role of Income Tax in Taxation of Agricultural Sector
In taxation of agricultural sector, there are three types of taxation. These are taxation of agricultural incomes, taxation of goods and services that the people in agricultural sector consume and taxation of agricultural land (Görgün, 1973; Lewis, 1976).
Taxation of agricultural sector is inevitable especially in the countries in which agricultural sector occupies a big place in the economy and the taxes to be collected also need to have some special properties. Therefore, a taxation system to be established for agricultural sector should provide the necessary resources for public services and industrialization and also contribute to solve the problems in the traditional structure in agricultural sector. The first objective, that is, funding, depends on conditions such as the ultimate use of agricultural land, the use of current technology and increasing the productivity per labour. Second objective of the taxes in agricultural sector is to change the traditional structure of agriculture. Here, the traditional structure refers to the following two points. First one being ownership structure of agricultural land and second one the diverse action and reaction relationship between market mechanisms and agricultural sector. These factors, on the one hand, prevent potential agricultural production, and, on the other hand, prevent the economic and political development of the system. Therefore, these related problems in traditional structures should be solved as soon as possible (Önder, 2012).
As long as agricultural sector is not charged with tax obligation in order to realize the objectives above, it will take a longer time to solve the problems in traditional structure and the necessary resources will not develop automatically in agricultural sector. Because when this sector, which has not yet been paid for, or has a very weak relationship with the market, is left alone, it develops quite slowly. The resources created with this way will be used by various bodies ineffectively in pieces. However, it is necessary to create value surpluses in agricultural sector as well as to collect these surpluses in small, integrated pieces, that is, without broken pieces. Therefore, on the one hand, finance of public services on the other hand, creating resources for industrialization necessitate the application of direct taxation in agricultural sector (Önder, 2012).
Moreover, it is thought that income tax, one of the direct taxes, is the most ideal and modern method in terms of justice of taxation and taxation technique in the taxation of agricultural incomes (Saygılıoğlu, 1977). However, applying a tax based on real income in agricultural sector has some troubles even in developed countries. First of all, recognition of the activities in agricultural ←16 | 17→sector is not easy. This derives from the characteristics of agricultural activities. For instance, some inputs used in agriculture such as fertilizers will not only increase the fertility of the soil in short term but also in the long term as well. In this case, the problem of whether the fertilization costs will be considered as operating costs or investment costs makes it difficult to calculate the annual net income. Another problem is that small family businesses are widespread in agricultural sector, and they do not keep the necessary business accounts for application of tax based on real income. That being said, the fact that majority of the public, especially in less developed countries, is illiterate also affects the registry and account-keeping activities (Görgün, 1973; Yuluğ, 1968; Yücelik, 1971). Moreover, if the barter economy, exchange is common in agricultural sector, in an economy and monetary economy does not work, there will even be no tax base because the incomes do not convert into actual money. When the agricultural sector in these countries is in question to be included in the scope of income tax, most of the businesses in agricultural sector are subject to taxation upon lump sum income, not the real incomes. However, the troubles in tax application may lead to great injustice in the taxes based on lump sum income method. In order to avoid this situation, there is a usual tendency to keep tax exemptions and reductions too broad. The fact that the structure of lump sum income taxes is suitable for tax evasion and this type of taxes cannot monitor the changes in real incomes closely reduces the efficiency of these taxes (Görgün, 1973).
However, the principle of universality besides the principle of justice in taxation also necessitates the taxation of agricultural incomes within income tax (Feyzioğlu, 1954). In addition, the fact that income tax cannot cover the agricultural sector facilitates the income items to be concealed in other sectors, and this is the main factor for low income tax efficiency. Therefore, it will be appropriate to tax the agricultural sector – despite the troubles it has – within the income tax system (Yaşa, 1965).
In fact, income taxation has many various beneficial aspects. Through this system, taxation is attributed to the concept of income which is the best sign of taxation capacity. As long as applied well, we can obtain a highly flexible taxation type and therefore an important tool for the redistribution of the income and the struggle against inflation or deflation. In addition, this system enables the opportunity to regulate the taxation better in terms of promoting effects, social justice and some other purposes (Yuluğ, 1968).
As is seen, although income tax application in agricultural sector is an ideal and modern method, it has also some troubles for especially underdeveloped countries.←17 | 18→
3 Taxation of Agricultural Sector in Turkey Within Income Tax
The largest tax reform of the Republic Period was realized with Income Tax System in 1950. ITL, Corportae Tax Law (CTL) and Tax Procedure Law (TPL) are parts of this reform (Yücelik, 1971). However, here, agricultural incomes were excluded from income tax. Technical difficulty in direct taxation of agricultural incomes, the desire for not decreasing the success of income tax reform and the political thoughts during the transition to multi-party system had an effect in this decision (Yaşa, 1965). That being said, excluding the agricultural sector forming more than 40 % of the national income was severely criticized especially in terms of tax competition.
Agricultural sector was firstly included in the system by the Law numbered 202 in 1963. Therefore, agricultural sector was not subject to income taxation in the period until 1925 after abolishing the tithe, ignoring the fact that Soil Products Tax was not regarded as a successful application between 1943 and 1946 (Önder, 1988).
Besides real taxation system, some methods such as small farmer exemption, agricultural income exception, lump sum basis, lump sum basis for the determination of expenses and tax cut were applied within different taxation policies in taxation of agricultural incomes since the past (Taşdelen, 2010). According to the Law numbered 4369 enacted with the amendment made in 1998, the method of stoppage at source (tax cut) is adopted today as the main principle in taxation of agricultural incomes. However, real taxation system was accepted for the farmers who exceeded the business size and the standard of agricultural motor vehicle. In order to tax a farmer according to real taxation system, it is sufficient to exceed one of the standards: the business size or the agricultural motor vehicle (Şenyüz, Yüce and Gerçek, 2013).
Tax stoppage at source is included in 94th Article of ITL. Accordingly, while tax responsible persons and corporations are purchasing their agricultural products, they have to make stoppage at source at the rate indicated in the law during the payment on account or in cash. However, there is no tax cut in the purchases for special needs. Tax cut rates from different agricultural activities are regulated in 11th item of 94th article of ITL as following:
a) For animals and their products and hunting and fishing products:
i) 1 % for purchases by registering in commodity exchange markets
ii) 2 % for the others left
b) For other agricultural products:
i) 2 % for agricultural products purchased by registering in commodity exchange markets
ii) 4 % for the others left
c) For the services within agricultural activities:
i) 2 % for the services such as afforestation, maintenance, woodchopping, collection, transportation of the products, etc., and for the forest administration and the corporations which make a commitment to forest administration
ii) 4 % for other services
d) 0 % for direct income support to farmers and alternative product payments
- ISBN (PDF)
- ISBN (ePUB)
- ISBN (MOBI)
- ISBN (Softcover)
- Publication date
- 2019 (October)
- Cluster and exploratory spatial data analysis methods Asymmetric stochastic volatility Tax competition Inflation and economic growth Public expenditure Public revenue
- Berlin, Bern, Bruxelles, New York, Oxford, Warszawa, Wien, 2019. 352 pp., 15 fig. b/w, 81 tables, 13 graphs