Turkey Mulls Taxing Crypto Gains To Support Disinflation: Report Reveals
Turkey plans to introduce taxes on gains from crypto and stock trading. This was revealed by an official on June 5, and the decision is part of the strategic move to enforce strict fiscal discipline and improve price stability after the country has faced inflation challenges
Turkey Plans To Tax Crypto Gains
The proposal to impose tax on crypto and stock gains was discussed by Turkey’s Finance Minister Mehmet Simsek during a ruling-party meeting over the weekend. At the meeting, Simsek emphasized the necessity of proper taxation on all financial income.
Simsek had previously stressed the government’s dedication to creating a fair tax system, which includes the introduction of a minimum corporate tax. This proposed regulation is a departure from the previous policy, which reduced tax on stock gains from 10% to 0% In 2008.
Turkish parliament review on crypto legislation is scheduled for this week, as new regulations are expected to be addressed after the parliamentary review. Meanwhile, the specific details of the plan are still under review, and discussions are expected to continue.
The impact of the news has seen a drop in the Borsa Istanbul 100 index, which closed at 1.8% on June 4. The after-effect of the news also led to a drop in the Turkish currency – lira, which saw a 1.2% depreciation. Also, the Turkish stock index fell by 1.4%, and the banking index saw a significant drop of 3%.
The Turkish stock index fell 1.4%, hitting a new low for the day, and the banking index fell 3%. Media reports said Turkey is considering taxing profits from stocks and digital currencies.
— Annette (@Annette_888) June 4, 2024
This proposed move to tax gains from crypto and stock trading is also coming amidst an increasing Turkish interest in the stock market. Central Securities Depository of Turkey reported an 8.3 million or almost seven times growth of equity accounts since early 2020.
Deep Dive Into Turkey’s Cryptocurrency Regulation
The inclusion of Turkey to the Financial Action Task Force’s (FATF) “grey list” in 2021 has created a palpable fragility and lack of confidence in the Turkish economy. Since then, the country has been devising means to be removed from that list, with the option of regulating the crypto space being considered.
Many people have adopted cryptocurrency as an alternative source of financial security – highlighting its popularity.
In mid-2022, a minimum asset base of 100 million lira (an estimated $3 million) was proposed by President Recep Tayyip Erdogan’s AK Party for cryptocurrency enterprises. At the time of reporting, a final decision on this matter has not been reached.
Meanwhile, Turkey’s Treasury and Finance Minister Mehmet Simsek has been vocal about enacting crypto laws. He revealed in January 2024 that Turkey is nearing completion of the crypto framework and has satisfied 39 of the 40 FATF requirements.
On May 16, Turkey submitted a crypto bill to regulate the crypto market by international standards. This new legislation covers every part of the crypto industry.
