The Government plans to introduce new tax laws during 2007 following pressure by the International Monetary Fund. But a recent survey shows this may be a difficult task.

The survey carried out by the Turkish tax authorities found that tax payers declare less than 50% of their earnings for tax. But the Turkish Government plans to introduce a new tax system from 2007 to turn around this situation and bring in much needed tax revenue to get its books in order.

Part of the planned reforms will introduce powers to investigate citizens who appear to live beyond their means or over and above their declared income by checking credit card accounts, bank accounts and other financial transactions. They will also take a close look at property purchases and sales as well as the purchase of vehicles.

We will wait to see what the final reforms look like but unless they build in incentives, such as tax free earnings limits and reduced percentage take, the struggle to curb the culture of tax evasion could take some time to beat.