Turkey’s Ministry of Treasury and Finance Introduces Full Digital Tax Audits, Streamlining Compliance and Reducing Costs.
Turkey is entering a new era in financial oversight as the Ministry of Treasury and Finance, under the leadership of Mehmet Şimşek, launches a fully digital tax audit system. This innovative system is designed to streamline tax compliance, reduce costs, and enhance efficiency, marking a significant milestone in the nation’s digital transformation.
The new system will allow tax inspectors and taxpayers to meet, conduct discussions, and complete necessary paperwork entirely online. “With this system, both the inspectors and taxpayers will connect electronically, conduct meetings in this environment, and official documents will be processed digitally,” said Şimşek, highlighting the revolutionary change. This digital shift is expected to be fully operational within a year, incorporating advanced technologies such as e-signature, teleconferencing, machine learning, and artificial intelligence.
Şimşek also emphasized the importance of using locally sourced systems and software. “We are avoiding the use of foreign cloud services to ensure the security of tax-related data and support the national economy,” he noted. By housing all data on Ministry servers and utilizing domestic software, the initiative aims to protect tax privacy while fostering local technological growth.
Previously, documents and records had to be presented in person to tax inspectors, but this new system allows for the complete digitization of the process. Even in scenarios where physical meetings were once necessary, such as when documents could not be delivered electronically, the new approach will eliminate these requirements, ensuring that all records are electronically signed and stored. This shift is expected to reduce operational costs related to paper, toner, and printers, creating a 100% digital audit unit.
One of the most significant benefits of this new system is the flexibility it offers taxpayers, especially those residing abroad. Under the old system, taxpayers were often required to return to Turkey for audits, incurring significant time and financial costs. However, the new system enables remote participation, allowing taxpayers to fulfill their legal obligations from anywhere in the world. This change is anticipated to reduce the time and administrative burden associated with tax compliance, making the process more accessible and efficient.
The new electronic system also allows tax inspectors to conduct audits across the country without the need for travel. This will enable a more focused allocation of resources, as inspectors can target specific regions or sectors as needed, without the disruption of physical relocation. Moreover, in extraordinary situations, the system ensures that public services continue without interruption, as all necessary meetings, training sessions, and conferences can be conducted electronically, reducing travel and accommodation costs.
By bringing together inspectors and taxpayers from different cities in a virtual environment, the system also mitigates the risks associated with localized audits. Additionally, the introduction of e-settlement and e-explanation processes will further enhance the digitalization of tax compliance. This system is expected to increase tax awareness and voluntary compliance through online training and education programs tailored to various sectors.
As Turkey moves forward with this groundbreaking initiative, it sets a precedent for how digital transformation can enhance government efficiency, safeguard data privacy, and reduce operational costs, all while making the tax compliance process more accessible and equitable for all citizens.
Source: Trthaber / Prepared by Irem Yildiz