Restructuring of Turkey Tax Audit Units

Restructuring of Turkey Tax Audit Units

Hayriye Işık (Namık Kemal University, Turkey), Şenol Gelen (Tekirdağ Tax Department, Turkey) and Elif Sonsuzoğlu (Near East University, Cyprus)
DOI: 10.4018/978-1-5225-2245-4.ch003
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As a major source of country's fiscal revenue and a powerful tool for macro economic management, taxation and taxation system has a critical role in any country. Recently Turkish government and Turkis Finance Ministry now formulating new tax audit unit. Although there is an increase in tax revenues, it couldn't have been found that there was a relation between the rise in the number of inspectors and that in tax revenues. There is a success in alleviating the informal sector, regarding employment rates. Regarding tax equity, the study has revealed that, this equity had been perished via deterioration in favor of indirect tax revenues against direct ones; and also it evaluated Turkisy tax audit and its historical development. Finally we will evaluate new tax audit system and it's efficiency and its effect on the realization of desired fiscal and economic effects of the rise in the number of inspections.
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Tax Audit Concept

A tax is “a compulsory and non-refundable monetary payment that is collected from natural and legal persons based on the sovereign right of states in order to finance the expenditures required for public services and public debts.” (Akdoğan, 2006).

The main basis for rendering public services is to have sound revenue with continuity. One of the healthiest and most important sources for states to deliver public services such as justice, health, security, education and public works is the tax revenues. In modern states, taxes are mainly identified based on the statements by the taxpayers, and accuracy and reliability are ensured through subsequent inspections and audits. This method which can be defined as principle of statement leads to tax losses because taxpayers do not fulfill required tasks with respect to the full and timely statement of their incomes. Therefore, it is necessary that the tax administration audits the activities, book entries and statements of the taxpayers through examinations and inspections.

Tax audit can be defined as “all of the controls and processes carried out by the revenue administration to fully identify the taxpayer who is liable to pay taxes in accordance with the tax laws and the taxable event and to find out whether the taxpayers conform to the procedures, principles and rules of the applicable tax system” (HUD, 2004); briefly and simply but in general, “examination by the tax administration to find out whether the taxpayers act in accordance with the laws (Ünal, 2007).

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