ECONOMY

Unregistered Turkish economy

ANKARA (Reuters) – Turkey intends to launch tighter tax controls in 2008 in an effort to rein in its large black economy, a move which a government official said could bring in billions of dollars in additional tax revenues. A worsening global backdrop and slowing economic growth rates have forced Turkey to consider a new approach to the unregistered economy, which officials estimate could be between half and twice the size of the formal economy. «The unregistered economy is listed in the government’s agenda as an issue to be tackled with priority… The prime minister has ordered a big campaign to widen the formal economy,» deputy head of the Revenues Administration Bulent Tas said. The government will create a forum of private sector representatives and state officials to decide upon the most effective steps against unregistered transactions, officials said. «The government is willing to make progress in 2008 by taking important steps in the battle against the black economy in areas which have been ignored so far,» said a senior government official who declined to be named. Turkey estimates tax revenues at 171.2 billion lira ($141.5 billion) in 2008. Some Turkish firms declare revenues lower than actual figures and some operate entirely in the black economy. «Even if 10 percent of the black economy can be recorded, existing revenues can rise by a few billion dollars,» said another official, who declined to be named. The Finance Ministry will apply new technology in detection and harsher sentences for tax evaders. Simplification of the tax code, use of new technology, such as sending SMS messages to taxpayers’ mobile telephones and installing devices at petrol stations to monitor sales, are aimed to create a more efficient system. A planned tax reform bill has yet to be brought before the Turkish parliament.