The Distribution of Tax Burden in Türkiye: An Analysıs of Effective Tax Rates for the 1998–2023 Period

Abstract

Since tax incentives significantly reduce the tax burden calculated according to statutory tax rates, the statutory tax rate becomes less informative, while the effective tax rate, which represents the actual tax burden on taxpayers, gains prominence as a more accurate measure. Both the reasons behind the implementation of tax incentives and their impact on the tax burden should be evaluated in terms of achieving the objectives of justice and efficiency in taxation. This study estimates average effective tax rates (AETR) using the methodology developed by Carey and Rabesona (2004). According to the estimation results for Türkiye for the 1998–2023 period, the AETR on salaries and consumption is high, whereas the AETR on capital and on personal income other than wages is low. This finding, which undermines the principle of equity in taxation, shows that the principle of efficiency predominantly shapes Turkish taxation and that the tax structure does not adequately reflect individuals’ financial capacity.

JEL: H20, H21, H24