Tax brackets updated for 2023: Will tax burden on wage earners ease?
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Minister of Treasury and Finance Nurettin Nebati announced today (December 30) the new tax brackets which will be valid in 2023.
Accordingly, the first tax bracket has been raised from 32,000 to 70,000 lira, the second from 70 to 150 thousand lira, the third from 250 to 550 thousand lira, and the fourth from 880 thousand to 1.9 million lira.
These increases correspond to an increase by 122.93 percent, which is the revaluation ratio published in the Official Gazette on November 24 last month.
The taxes and duties are also increased by this revaluation ratio, which was 36,2 percent last year.
Erdoğan did not use his authority for a higher rate
President Recep Tayyip Erdoğan had the authority to increase the tax brackets by an extra 50 percent (or 50 percent less) which he did not use.
The Confederation of Progressive Trade Unions (DİSK) had this Tuesday (December 27) called on the President to take initiative and raise the tax brackets by an extra 50%.
The first tax bracket would be set at 105 thousand lira (5,600 US dollar) if Erdoğan had used his authority.
For many years there has been harsh criticism about the increasing tax burden on wage earners.
That the tax brackets was not raised in parallel with the inflation rate for almost two decades was the most significant reason for this increasing burden.
Last year tax exemption was brought for the part of the wages equal to the minimum wage, which will be continued in 2023 Minister Nebati announced.
So, with the figures for this year, wage owners will be exempt from income and stamp tax for 120 thousand 96 lira of their annual wages. And thus a total of 16,616 lira of income tax and 911 lira of stamp tax will not be deducted from their wages in 2023.
Tax exemption limits also raised for allowances
Nebati also announced that the tax exemption limit for food allowance which was applied for 51 lira a day was increased to 110 lira a day and that for transportation allowance from 25,5 lira a day to 56 lira a day.
Thus the employers will be able to pay their employees 2.860 lira a month for their meals and 1456 lira for their transportation in a month both of which will be tax-exempt.
Income tax rates and tax brackets in 2023• 15 percent for the first bracket • 20 percent for the second bracket less the first bracket • 27 percent for the third bracket less the second bracket • 35 percent for the fourth bracket less the third bracket • 40 percent for the rest less the fourth bracket |
(HA/PE)