Turkey Strikes Back at Cryptocurrencies: A Transaction Tax is Evaluated
As part of a comprehensive tax reform, the Turkish government has included a transaction tax that will affect all cryptocurrency transactions.
Spaziocrypto brings you the weekly summary of major Web3-related news.
SubscribeAs part of a comprehensive tax reform, the Turkish government has included a transaction tax that will affect all cryptocurrency transactions.
Get the latest news, learn from experts, discover new tools, and find inspiration right in your inbox.
No spam. Unsubscribe anytime.
The Turkish government is notoriously unfriendly to cryptocurrencies. Those who wanted further proof of this had it in the form of the recent idea of introducing a so-called transaction tax: a 0.03% tax on cryptotrading-related transactions. The move is part of a more profound tax overhaul wanted by the Ministry of the Economy and justified, at least on paper, by the budget deficit that has hit the country since the tremendous earthquake at the beginning of 2023.
New Transaction Tax, Old Approach to Cryptocurrencies
The move harks back to the Turkish government's usual approach to decentralised finance, which has always been frowned upon by the executive, and proposes a new tax in the regulation of financial transitions. Bloomberg experts have already analysed the new tax as soon as the Turkish government made it known and concluded that such a measure could be something of a boon for Turkish coffers. According to analysts at the well-known financial aggregator:
A Major Tax Reform
The Turkish government has revealed a tax reform of impressive dimensions. This is expected to generate as much as 226 billion Turkish lira - about $7 billion - which corresponds to 0.7% of the national GDP. Mehmet Simsek, Minister of Treasury and Finance of Recep Tayyip Erdogan, has drafted a draft of the law and parliamentary approval is expected by the end of June.
Within the package, the transaction tax aims to take advantage of the growing popularity of cryptocurrency trading, which is spreading like wildfire in the country. Investors want to hedge against inflation and currency depreciation. When authorised (it is more a question of when than if), the reform will mark the biggest tax change in Turkey in the last two decades.
It is thoughtful to include cryptocurrencies within the values to be taxed, since, as we elaborated a few days ago here on SpazioCrypto, we are in a phase where tokens are acquiring growing popularity worldwide.
The Transaction Tax Signals a Reversal of Route
It is easy to predict that the Erdogan government will approve the reform, since this is the will of the sultan and, as we know, his administration is democratic only in appearance giventhe power he has seized in the geological era in which he has been head of state. Beware, however, of taking it all too much for granted because, despite his power, the president has often encountered setbacks in his governing work. Especially when it came to regulating and legislating taxes on financial transactions.
In the past, Erdogan and his people had always denied that they would retaliate against gains from cryptocurrencies and their related stocks. The executive's aversion to the sector, however, is well known and no member of the Turkish government staff hasever denied the possibility of the imposition of very limited taxes on this type of transaction. The transaction tax therefore marks the definitive crossing of that hypothetical threshold. The motivation for this choice was given by Minister Simsek himself, who said:
Read Next
Crypto-Millionaire Loses 43 Million Betting Against Bitcoin
Crypto-millionaire James Fickel, known for his aggressive trading, lost millions betting on the appreciation of Ether against Bitcoin.
Crypto Fraud Alert: 5.6 Billion Stolen in the US
An FBI report, covering the year 2023, highlights numerous frauds against cryptocurrency investors.
Elon Musk And Cryptocurrencies Against The Backdrop Of The US Presidential Race
Elon Musk's intense activity on his social leaves the door open to his possible political ambition. If so, this could be good news for cryptocurrency.
G20 and International Cryptocurrency Regulation
During the G20 summit in New Delhi, leaders of major global economies approved the implementation of an international regulatory framework for cryptocurrencies.