Government Detects Over 80 Billion Lira Discrepancy
The Ministry of Treasury and Finance has recently announced that starting in 2024, inflation accounting will be re-implemented in order to purify financial statements from the effects of increasing inflation since 2021. This decision was made to ensure the accuracy of financial statements during high inflation periods.
Inflation accounting involves the correction of assets, obligations, income, and expenses to account for inflation effects. As a result of this reimplementation, some taxpayers may need to pay taxes due to corrections made in practice, as per the provisions of the Tax Procedure Law.
To ensure compliance with inflation accounting regulations, the Tax Audit Board Presidency (VDK) has initiated inspection procedures to identify irregular or incorrect practices. Taxpayers who are found to have not applied inflation accounting correctly or have abused the system are subject to audits.
Taxpayers identified as having faulty transactions by the VDK Risk Analysis Center have been asked to explain their inflation corrections. Those who admitted to errors or incorrect applications have provided new declarations, leading to an increase in the tax base by approximately 13.5 billion pounds. Taxpayers whose explanations were not accepted have been referred for further examination.
Subsequent audits by the VDK identified incorrect transactions, leading to a second audit study targeting taxpayers of varying scales. The expected increase in the tax base as a result of these audits is estimated to be around 67 billion pounds. Taxpayers will be called upon to explain their practices in this process as well.
Overall, the difference in the tax base identified through audit processes has exceeded 80 billion pounds, with potential for further increases. It is crucial for taxpayers to apply inflation accounting correctly to avoid penalties in the future.
Treasury and Finance Minister Mehmet Şimşek emphasized that the goal of these inspections is not to collect taxes but to ensure accurate application of inflation correction. By purifying financial statements from inflation effects, taxpayers can reflect their real financial situation accurately.
Şimşek highlighted that the success of the disinflation process will lead to transparent and reliable financial data for both enterprises and public finances. Compliance with inflation accounting regulations is essential for maintaining financial integrity and transparency.
