Turkey Consider Limited Transaction Tax on Stocks and Crypto

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As an analyst with a background in financial markets and experience in following the developments in Turkey’s economy, I believe that the government’s decision not to impose taxes on profits earned from stocks and cryptocurrencies is a wise one. The proposed “very limited” transaction tax instead could potentially lead to market inefficiencies and increased commissions and fees for traders.

Mehmet Simsek, Turkey’s Minister of Treasury and Finance, spoke about the country’s plans regarding taxing income from stocks and cryptocurrencies. Contrary to some speculations, Simsek explained that the government does not intend to levy taxes on profits gained from these assets. Instead, they are contemplating a minimal transaction tax as an alternative.

In a Bloomberg interview held in Ankara, Simsek mentioned that the Borsa Istanbul 100 Index experienced a reversal of earlier losses, climbing up to a 0.7% increase on Wednesday. However, this growth was later adjusted downwards to a mere 0.1% rise as of 5:18 p.m. in Istanbul. The market had previously taken a hit due to rumors about the government’s plans to impose taxes on income generated from stock and cryptocurrency transactions.

Mehmet Gerz, CEO of Ata Portfoy, expressed his concerns about the proposed stock trading tax. According to him, this tax may result in market inefficiencies and higher commission costs for traders. Essentially, it seems like an attempt to capitalize on heavy trading volumes.

Currently, Turkey lacks defined tax laws for dealing with cryptocurrencies. However, as of May 16, Turkey’s governing body has proposed a new legislation aimed at regulating the cryptocurrency market. Under this bill, any entity conducting business related to cryptocurrencies will be required to acquire a license and adhere to international standards.

The legislation aims to address the obligation for service providers to remit revenues and prohibits foreign crypto brokers to encourage a homegrown, regulation-compliant market. By implementing these measures, Turkey may avoid being on the FATF’s “gray list” and alleviate concerns from the Financial Action Task Force.

Based on Chainalysis’ findings, I analyze that my country ranks fourth globally in terms of estimated crypto trading volume, reaching approximately $170 billion in 2023. Surpassing the figures from nations such as Russia, Canada, Vietnam, Thailand, and Germany.

As a researcher studying the Turkish crypto market, I’ve discovered that since the beginning of 2021, it has become forbidden for individuals in Turkey to utilize cryptocurrencies such as Bitcoin (BTC) for making payments.

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2024-06-06 04:22