Şimşek to hold press conference on informal economy

May 21, 2012, Monday/ 16:05:00/ TODAY'S ZAMAN

Finance Minister Mehmet Şimşek plans to hold a press conference on the informal economy at the ministry headquarters in Ankara on Tuesday.

According to a written announcement released by the ministry, the meeting will provide information on the recent action plan to regulate the informal economy. Şimşek will give detailed information on the results of the implemented rules as well as introduce new regulations to rein in the informal economy.

Tax collection is a major issue in Turkey, where, as Prime Minister Recep Tayyip Erdoğan has stated, half of the entire economy is informal and therefore untaxed. Addressing businesspeople from the textile sector in İstanbul at the beginning of May of last year, he said the government's efforts to increase tax revenue are being hindered by the size of the informal economy in Turkey. He asked the business sector to be more sensitive to serving the country's macro interests by paying taxes.

In the past few years, Erdoğan's government has intensified audits on the private sector to deal with the issue of the informal economy. It is estimated that thousands of businesses currently operate in the informal economy by not paying income or corporate taxes and not paying their employees' social security premiums to the state -- despite risking a hefty tax bill if detected by Ministry of Finance auditors.

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