Treasury asks for value added tax on free water in İstanbul

Click to read the article in Turkish

The İstanbul Water and Sewerage Administration (İSKİ) has announced that following the audits of the Court of Accounts and İstanbul Tax Inspection Board, it has turned out that it has Value Added Tax (VAT) liabilities for the past six years and this debt will be paid by consumers.

According to the İSKİ statement, the VAT collected on 'Maintenance Costs' between 2016 and 2020 was deficiently accrued and now a Value Added Tax is also asked for the water offered free of charge.

In its statement about the issue, which is also printed on citizens' water bills afterwards, it is stated that "by being calculated based on the imputed cost, a tax is also to be declared on the water provided to İstanbulites free of charge in 2019-2020-2021 as part of 'Human Right to Water'."

Announcing that this amount will be indicated as an outstanding debt in subscribers' water bills, the İSKİ has noted that the amount to be collected will be transferred to the Ministry of Treasury and Finance.

Ministry has dismissed the claims

Making a statement in response to the İSKİ statement, the Ministry of Treasury and Finance has dismissed the claims.

Saying that the related announcement of the İSKİ "does not reflect the truth", the Ministry has referred to the Law no. 3065 on Value Added Tax and indicated that "the provisions of the regulation concerning the execution of the related law are applied to taxpayers indiscriminately and there is no practice specifically applied to the İSKİ as part of the regulation."

It is added to water bills

Amid these developments, the subscribers have started receiving water bills with the related tax added to the amount to be paid. The İstanbul Metropolitan Municipality has attached a note to the bills, explaining that "the VAT deficiently accrued due to the Maintenance Costs and the practice of Human Right to Water will be collected from the bills and the amount to be collected will be transferred to the Ministry of Treasury and Finance."

'It is against the legal regulations'

After Ekrem İmamoğlu from the main opposition Republican People's Party (CHP) won the local elections and was elected the İstanbul Metropolitan Mayor in 2019, the municipality introduced the 'Human Right to Water' practice. In its 2020 İSKİ Audit Report, the Court of Accounts found it against legal regulations and the practice was halted afterwards.

With a new decision passed by the İstanbul Metropolitan Municipal Council, the practice has been reintroduced. (HA/SD)