Turkish Tax News

History of Turkish Revenue Administration

Turkish Revenue Administration has a strong background.

The first fiscal organization in Ottoman Empire was established in the time of Murat the first.(1359-1389) In times of Mehmet II (Conqueror) and Süleyman I (Magnificent) as a result of the rise in revenues and expenditures of the empire this organization had been developed. However, first tax practice in Ottoman lands had been started by Osman Gazi; the founder of the Ottoman Empire.

Until 1838 there was no ministry of finance precisely in Ottoman Empire. Till to that time, the head of the organization dealing with the financial matters was barely a civil servant named as “district treasurer”(defterdar).

First official organization established in 1838. It was called “Bedeli Nüzul ve Avarız Dairesi”. It means directorate of tax of army’s needs and extraordinary war tax.

It was was officially established in the state organization. This ministry’s structure was formed of “Departments”(Daire) under the leaderships of “Chiefs”(Reis). In one sense today’s Revenue Administration’s duties were carried out by this department. In 1881 The Ministry of Finance was divided into two administrations as “Committee of Center” and “Committee of Province”.

In constitutional monarchy era, in 1908, some changes were made in the mission and organization of the Ministry of Finance.

The Republic of Turkey was established by Mustafa Kemal Atatürk and the other patriot Turks in 1923. In the First Turkish National Grand Assembly, the first law accepted was a tax law.

In 1923 the Ministry of Finance was established, although “The Code on the Ministry of Finance and Its Duties” was accepted in 1936.

Also Varidat Umum Müdürlüğü (The General Directorate of Revenues) was established in that time.

In 1942 The General Directorate of Revenues split two different directorates: The General Directorate of Direct Taxes and The General Directorate of Indirect Taxes (Vasıtasız ve Vasıtalı Vergileri Genel Müdürlüğü)

But its legal structure was declared by a law in 1946. And its name changed from Ottoman language to new Turkish:  Gelirler Genel Müdürlüğü (The General Directorate of Revenues)

Nevertheless, with the Law no 5345, adopted in 2005 the General Directorate of Revenue has been abolished and the PRESIDENCY OF REVENUE ADMINISTRATION has been established as dependent on the Ministry of Finance.

The objective of this law is explained as

“It has been prepared the principles related to foundation of the Revenue Administration, the organization, duties, authority and responsibility in order to carry out revenue policy with justice and impartiality and to collect other revenues with the least cost; to ensure willingly adaptation of taxpayers to the tax; by protecting taxpayers’ rights and providing high quality services, to take necessary measures in order to ensure that taxpayers implement their obligations easily, to work with the respect to main principles of transparency, accountability, participation, productivity, effectiveness, and customer focused organization.”

In parallel with the transformation to taxpayer-focused understanding in developed countries in order to increase the quality of public services, Presidency of Turkish Revenue Administration has been brought into a taxpayer-focused structure in the restructuring process.

The duties of the Revenue Administration are as follows:

  • to implement the state revenue policy, determined by the Ministry,
  • to facilitate the adaptation of taxpayers to tax and to carry out services,
  • to take necessary measures in order to protect taxpayer’s rights and relations based on mutual confidence between Ministry and taxpayers,
  • to inform taxpayers about their rights and obligations arising from the tax laws,
  • to participate in the law and by-law workings related to the state revenues policy,
  • to ensure the collecting of the governmental claims and to take necessary measures on this matter,
  • to take necessary measures in order to reduce disputes to the minimum level and to provide application accord,
  • to collect information about taxation and to implement the data processing activities,
  • to measure the costs of all exceptions, exemption and discounts in the tax laws or other fiscal laws, and to analyze their economic and social effects,
  • to carry out tax inspection and audit at the direction of main policies and strategies determined by the Ministry and to take necessary measures in order to prevent tax lost and invasion,
  • to take measures in order to ensure that the implementation of the local administration revenues policy is in compliance with the state revenues policy,
  • to review all proposals of laws and drafts of laws effecting revenues and to notify its decisions on these regulations,
  • to cooperate with other institutions and organizations on implementation of the revenue laws and to carry out data trade with this purpose,
  • to observe international events in the field of its function and to cooperate with the EU, international organizations and other states,
  • in accordance with the laws, to carry out operations for the deletion of tax dues and other governmental claims, of which due time is over,
  • to ensure to gain the qualified human resource, to improve perfection, to make career plans and to measure their performance,
  • to prepare organizational ethic rules in the frame of rules determined by the Civil Servants Ethic Committee and to announce to the employees and taxpayers,
  • to announce activity results to the public in regular times and to explain the annual activity report to the public,
  • to carry out other duties assigned by laws.

(Source: Taxation in Turkey publication, Turkish Revenue Administration)