Statement from Finance Minister Simsek for issue of tax on credit cards

Minister of Treasury and Finance Mehmet Şimşek made his first public statement about the planned credit card tax regulation, which aims to generate funds for the Defense Industry Support Fund. This regulation proposes an annual deduction of 750 TL from credit cardholders with a limit of 100,000 TL or more, and the revenue will be allocated to the Defense Industry Support Fund.

The regulation has sparked widespread criticism from the public. In response to these reactions, Şimşek provided clarifications during a live broadcast.

He emphasized the importance of the defense industry in the face of the regional challenges and security threats that Turkey faced, stating that securing necessary resources for the defense sector was a strategic necessity. Şimşek explained that the budget for the Defense Industry Support Fund had been raised to 165 billion TL in 2023, and various proposals were considered, including input from economic experts and officials.

Şimşek stressed that the revenue from this regulation would be exclusively used for the Defense Industry Support Fund and not to reduce the budget deficit. He assured the public that “not a single penny of this package would go into the budget.” Nonetheless, he acknowledged the intense public backlash, suggesting that the ruling AKP party might reconsider certain aspects of the regulation. He indicated that the regulation could be reviewed, with flexibility on the table.

Public Reactions and Potential Revisions

Many credit cardholders with limits exceeding 100,000 TL have started reducing their card limits to avoid the new charges. In light of this, it has been reported that AKP may reconsider the regulation, potentially increasing the limit threshold. According to AKP sources, Turkey currently has a total of 126.45 million credit cards, with 17.5 million of them having limits over 100,000 TL. The government expects to generate approximately 13 billion TL annually from this regulation, with the yearly deduction equivalent to around 60 TL per month. However, AKP sources acknowledged the public’s reaction, indicating that the regulation may be adjusted, and the threshold limit could be raised.

In conclusion, while the government remains committed to funding the defense industry, it appears that adjustments to the regulation are possible in response to public concerns.