The parliamentary Plan and Budget Commission, where the bill foreseeing a charge of 750 lira from credit cards with a limit of 100 thousand lira and above will be discussed, has commenced. According to the analysis of the bill, a revenue of 13.1 billion lira is expected from the 750 lira service fee to be collected from credit cards. With other deductions and taxes in the draft, a total revenue of nearly 69.3 billion lira is expected to be obtained by 2025.

HAS THE CREDIT CARD TAX BEEN IMPOSED?

The bill foreseeing a charge of 750 lira from credit cards with a limit of 100 thousand lira and above is being discussed at the parliamentary Plan and Budget Commission.

It is expected that the controversial bill will be enacted within this year.

Contribution payments for the Defense Industry Support Fund (DSSF) are expected to bring in 69.3 billion lira in revenue. According to the impact analysis of the bill:

– An expectation of 13.1 billion lira from the regulation of the 750 lira charge to be collected from credit cards with a limit of 100 thousand TL and above is made. – The bill also introduces a 20% excise duty on drones and watches exceeding 5 thousand lira. During the January-July period of 2024, around 59 thousand drones with an approximate value of 753 million lira and around 25 million drones for recreational purposes with a value of 601 million lira were imported.

If a 20% excise duty is applied, the annual excise duty revenue effect is estimated to be 464 million lira (for imports). However, due to the difficulty of identifying those used for military purposes precisely, it is presumed that the revenue effect will be less than the calculated amount. During the January-July period of 2024, around 2.9 million watches with a value of 7.5 billion lira were imported.

NEARLY 2 BILLION LIRA REVENUE FROM WATCHES

– If a 20% excise duty is applied to watch amounts exceeding 5 thousand lira, the annual excise duty revenue effect is estimated to be 1.7 billion lira. – An expectation of 275 million lira from the motorcycle regulation. – An expectation of 28.8 billion lira from the SSDF participation fee to be collected from declarations given to tax, insurance, and customs authorities in 2025 for the Defense Fund. – An expectation of 9 billion lira from the 750 lira contribution fee to be collected from transactions at the Land Registry, 13.1 billion lira from credit cards with a limit of 100 thousand lira and above, and 18.4 billion lira from the contribution fees to be collected for procedures at notaries, amounting to a total revenue expectation of 69.3 billion lira. – A deadline of 16 billion lira in tax adjustments

The bill also includes a provision for deferring the tax impact created by inflation adjustments on investments during the investment period. According to the impact analysis, during the 2024/2 Temporary tax period, 20,006 taxpayers have been included in the investment account correction process, resulting in an inflation adjustment profit of approximately 200 billion lira.

WHAT IS THE CREDIT CARD TAX?

A yearly charge of 750 lira will be collected from credit cards with a limit of 100 thousand lira and above to contribute to the Defense Industry Support Fund. The bill requests the service fee from credit cards to start from January 1.

In the draft presented to the parliament, this fee is defined as follows: “An annual fee of 750 TL for each cardholder from cards with a defined limit of 100 thousand Turkish liras and above (If the card is renewed for any reason during the year, no additional fee will be charged if the fee has been paid for the relevant year, and if the card is canceled for any reason, the fee paid will not be refunded. No additional fee will be charged for additional cards created within the limits of a physical card and for non-physical cards.)”

WHEN WILL THE CREDIT CARD TAX COME INTO EFFECT?

The bill requests that the service fee from credit cards start from January 1. In the beginning of January, the service fee will be deducted from the credit card holder by the bank. According to the regulation, the service fee will also be collected from cards with increased limits or newly acquired cards during the year. Those with multiple cards will pay a service fee for each card. HOW WILL THE CREDIT CARD TAX BE PAID?

The service fee from credit cards will be deducted by the bank in January and transferred to the fund. If the draft becomes law, banks will deduct 750 TL from customers with a limit of over 100 thousand lira as of January 1, and transfer the deduction to the state. This deduction, like the current credit card fees, is expected to be deducted from the credit card.