Another Turkish contribution to economic thought: Taxing over Credit Card Limits

A strange new tax is on the agenda:

The Turkish government has recently proposed a new bill that includes several measures to raise funds for the country’s defense industry. One of the key aspects of this proposal is a new tax on credit cards with high spending limits. Here’s what we know about this specific part of the proposal:

Credit Card Tax Details

The proposed bill introduces a “defense contribution fee” for credit card holders with high spending limits[1][2]. Specifically:

• The tax applies to credit cards with a monthly spending limit of 100,000 Turkish lira (approximately $2,915) or more[1][2].
• Cardholders meeting this criteria will be required to pay an annual contribution of 750 Turkish lira (about $22) per card[1][4].

Purpose and Expected Revenue

This new credit card tax is part of a larger initiative aimed at increasing resources for the Defense Industry Support Fund (SSDF)[1]. The ruling Justice and Development Party (AKP), which submitted the bill, estimates that the overall proposal will:

• Raise between 70-80 billion Turkish lira (approximately $2-2.3 billion) annually for the defense industry fund[2][3].
• Contribute to the development and support of Turkey’s defense sector[2].

Other Related Measures

The credit card tax is just one component of a broader set of proposed financial measures. Other aspects of the bill include:

• Additional contributions based on tax declarations[3].
• Fees on property sales transactions and vehicle registrations[1].
• New fees for various notary services[1].
• Special consumption taxes on non-military drones and expensive watches[2][3].

Implementation and Impact

If passed, this legislation would affect a significant number of credit card holders in Turkey and potentially impact consumer spending habits. The proposal has raised discussions about the fairness of targeting high-limit credit card users and the potential economic implications of such a measure.

It’s important to note that as of now, this is a proposed bill and has not yet been enacted into law. The proposal will need to go through the parliamentary process before potentially becoming official policy.

Citations:
1. Bianet – Turkey Poised to Collect Defense Budget Contributions from Credit Cards, Tax Declarations
2. Duvar English – Turkey Aims to Collect Contribution to Defense Industry from Credit Cards
3. Ekathimerini – Turkey Submits Bill to Raise €2 Billion Annually for Defense Fund
4. Türkiye Today – AK Party Credit Card Proposal for Defense Budget
5. Defense Mirror – Turkish Government Proposes Credit Card Surcharge to Finance Defense Procurementnt