As the Turkish currency, Lira, continues to weaken amid a struggling economy, the country’s lawmakers are taking new measures to repair its deficit budget while targeting crypto traders.
Amid efforts to regain economic stability, the Turkish authorities have proposed a major fiscal reform on their tax structure. One part of the reform aims to impose a 0.03% levy on all crypto transactions conducted in the country.
Turkey to Impose Tax on Crypto Transactions Not Profits
The lawmakers’ decision to tax crypto transactions comes about a week after speculations on its plans to tax profits from crypto and stocks spurred the internet. However, Mehmet Simsek, the Finance minister of Turkey, debunked this news last Wednesday, saying there is no such plan.
Simsek disclosed that the government only considers a limited tax on crypto transactions instead of profits. Turkish lawmakers have taken a step further in the following new tax proposals, which are considered the most significant tax overhaul in decades.
Turkey Taps into Booming Crypto Market
While the new tax rule has yet to be approved by parliament, it aims to generate new revenues estimated at 0.7% of Turkey’s G.D.P., which amounts to about 226 billion liras for state coffers, worth about $7 billion.
Furthermore, the country’s lawmakers are leveraging the new tax structure to tap into its booming crypto ecosystem. With eyes on the Turkish crypto investors, who are increasingly joining the crypto bandwagon to hedge against the country’s inflation and currency depreciation, the lawmakers have proposed a 0.03% tax levy on crypto transactions.
“The ministry is considering a 0.03% transaction tax on crypto trading, which has become popular among retail Turkish investors seeking a hedge against lira weakness and rampant inflation. The move would bring in 3.7 billion liras a year, according to official projections,” Bloomberg reported.
