Turkey is considering implementing taxes on gains from cryptocurrency and stock trading in order to support disinflation, according to a recent report. The decision was disclosed by an official on June 5 as part of a strategic effort to enforce fiscal discipline and enhance price stability in light of inflation challenges faced by the country.
The proposal to tax gains from cryptocurrency and stock trading was put forward by Turkey’s Finance Minister Mehmet Simsek during a meeting of the ruling party over the weekend. Simsek emphasized the importance of properly taxing all financial income at the meeting.
Previously, the government had reduced taxes on stock gains from 10% to 0% in 2008. However, the proposed regulation now includes the introduction of a minimum corporate tax, signaling a departure from past policies.
The Turkish parliament is set to review new crypto legislation this week, with further details of the plan still under review and discussions ongoing. The news of the proposed tax has already had an impact, with the Borsa Istanbul 100 index closing 1.8% lower on June 4. The Turkish lira also depreciated by 1.2%, while the Turkish stock index and banking index both experienced drops of 1.4% and 3% respectively.
This move to tax gains from cryptocurrency and stock trading comes at a time when there is growing interest in the stock market in Turkey. The Central Securities Depository of Turkey reported a significant increase in equity accounts, with numbers growing almost sevenfold since early 2020.
In response to being placed on the Financial Action Task Force’s (FATF) “grey list” in 2021, Turkey has been exploring ways to improve its economy and restore confidence. One option being considered is regulating the cryptocurrency space, as many individuals have turned to cryptocurrencies as a means of financial security.
President Recep Tayyip Erdogan’s AK Party proposed a minimum asset base of 100 million lira (approximately $3 million) for cryptocurrency enterprises in mid-2022, although a final decision on this matter is still pending. Turkey’s Treasury and Finance Minister Mehmet Simsek has been vocal about enacting crypto laws, stating in January 2024 that Turkey is close to finalizing its crypto framework and has met 39 of the 40 FATF requirements.
On May 16, Turkey submitted a crypto bill aimed at regulating the crypto market according to international standards. This comprehensive legislation covers all aspects of the crypto industry, signaling a proactive approach by Turkey towards cryptocurrency regulation.
