Turkey is implementing a major fiscal overhaul that includes a 0.03% transaction tax on cryptocurrency trading to address the country’s budget deficit exacerbated by the 2023 earthquakes. The proposed tax reforms are expected to generate substantial revenue and mark the largest change to Turkey’s tax system in decades. The tax could yield approximately 3.7 billion TRY annually, directly boosting the nation’s economy amid challenging fiscal circumstances. The broader tax reform seeks to generate 226 billion liras, equivalent to roughly 0.7% of Turkey’s gross domestic product, critical for reinvigorating the nation’s economic recovery following the devastating earthquakes.
Despite denying plans to tax crypto and stock gains in the past, the Turkish government is now shifting its stance to include targeted transaction taxes. Finance Minister Mehmet Simsek stated that Turkey would “leave no area untaxed to provide justice and effectiveness in taxation.” The ruling party, led by President Recep Tayyip Erdogan, holds a parliamentary majority and is expected to pass the proposed legislation. Previous attempts to implement transaction taxes have faced backlash, and political contention is anticipated this time as well. Officials are preparing new tax legislation to be debated in parliament later this month, marking the most sweeping overhaul of Turkey’s tax code since levies were raised across the board after the 1999 earthquake.
The introduction of a transaction tax on crypto trading is part of a broader effort to regulate Turkey’s rapidly growing cryptocurrency market. Persistent TRY weakness and high inflation have driven many Turks to digital assets, and the government seeks to capitalize on this trend through taxation. In February, the Central Bank of the Republic of Turkey completed the first phase of testing its digital Turkish lira and moved into more advanced phases for widespread pilot tests. The country has seen noteworthy developments such as HSBC’s gold tokenization initiative and Garanti BBVA’s digital assets launch, reflecting the growing popularity of digital assets among Turkish investors as a hedge against inflation and currency depreciation.
Misyon Bank recently partnered with Swiss firm Taurus to enhance its digital asset custody and tokenization capabilities and position Turkey as a regional hub for these services. Misyon Bank plans to leverage Taurus’s expertise to offer digital custody services to various institutions, including banks, fintechs, and central banks. Turkey’s new tax initiative on gains from crypto and stock trading is part of the strategic move to enforce strict fiscal discipline and improve price stability after facing inflation challenges. The government’s efforts to regulate and tax cryptocurrency trading align with its broader goal of boosting revenue, fostering economic recovery, and regulating the rapidly growing digital asset sector. By introducing transaction taxes on cryptocurrencies, Turkey aims to leverage the increasing interest in digital assets among Turkish investors to generate revenue and stabilize the economy.
