Analysis of Vat and excise duty collected from motor vehicles and liquid fuel in Turkey and EU

In our thesis, mentioning about shares of VAT and Excise Duty in direct taxes, shares of VAT and Excise Duty collected from motor vehicles and liquid fuel in tax income and comparing these shares to EU countries. Besides, structure of VAT and Excise Duty rate, comparing VAT, Excise Duty and other taxes which collected from motor vehicles and liquid fuel and its applications, problems and solution suggestions. The VAT and Excise Duty taken from motor vehicles and liquid fuel are indirect taxes and the amount of Excise Duty obtained from liquid fuel sales is double size of the taxes which over three million income tax and corporation tax payers paid. In Turkey share of direct taxes in total tax income is more than indirect taxes. This situation is opposite to tax equality. When compared with EU countries, an inversely proportional characteristic determined in terms of VAT, Excise Duty and other taxes which are collected from motor vehicles and liquid fuels. In EU countries whose per capita income is several times more than Turkey, motor vehicle taxes are one tenth or one fifth of Turkey?s. Besides in EU countries there is no application about taxation of motor vehicles by Excise Duty. One of the most practiced ways to increase the tax incomes in Turkey is to increase tax ratios on motor vehicles. Especially the VAT collected from the Excise Duty is promoting liquid fuel fraud. In order to provide equity in tax system and harmonize with EU countries; arrangements should be made in VAT, Excise Duty and other taxes collected from motor vehicles and liquid fuels.