Statement from MÜSİAD on Taxation of Inflation Adjustment Differences
MÜSİAD made a statement after the issue of taxation of inflation adjustment differences was brought to the agenda again recently. In the statement, it was emphasized that concerns about the negative effects of this issue on the Turkish economy should be expressed more loudly.
“Taxation of inflation adjustment differences carries a high risk”
In the statement, it was stated that inflation adjustment is an accounting practice made to make the financial statements of companies more realistic during periods of high inflation. It was stated that this practice aims to reflect the financial situation of companies more accurately and is generally monitored under equity.
MÜSİAD emphasized that taxing inflation adjustment differences could threaten the financial sustainability of businesses and made the following warnings:
- There is a risk of causing negative effects on economic growth and stability.
- Problems such as damage to investor confidence and consequent increase in capital costs may be encountered.
- Weakening the financial health of companies and decreasing international competitiveness are among the possible consequences of such a tax policy.
In addition, it was noted that with the taxation of inflation adjustment differences, companies with strong equity but low non-monetary assets (stocks, subsidiaries, tangible assets, intangible assets) may face an expense-oriented, that is, loss-increasing situation . On the other hand, it was stated that businesses with weak equity but high non-monetary assets and financing by borrowing will have to pay more taxes with a revenue-oriented, that is, profit-increasing effect.
‘We invite you to take steps to support economic growth’
It was stated that the current implementation of inflation adjustment for SMEs may lead to equity and financing shortages. In the statement, “In such a difficult period when the Medium Term Program is being implemented step by step with patience and many sacrifices, our industrialists, especially our SMEs, are facing a great deal of financial constraints and difficulties, rising costs, increasingly difficult “competitive conditions and challenging factors of the employment environment.” “It is a fact that they are struggling. In this case, there is no situation or opportunity to bear this unfair tax that would be created by the inflation accounting that is requested to be applied.”
MÜSİAD stated that such taxation policies should be reconsidered and that it is essential to find more appropriate solutions in terms of economic sustainability, and called: “In this context, as MÜSİAD, we invite the economic management to adopt a more balanced approach on this issue and take steps to support economic growth.” found.
