Global tax competition problematic and national tax policies: Turkiye`s case

When we scrutinize the historical process, we see that the economy and thesocial life of the world have renewed itself continuously, and it is seen that although insome cases this circle had been broken, it had been undergone a gradual developmentprocess. In that development process, broking points had been emerged that hadchanged general characteristics of the process sometimes via the use of vapor power,sometimes by the application of an alternative thought system, and sometimes as aresult of giving up that thought system; and new identifications had been used toportray the change or transformation. Here, the phenomenon that is seen in post-1980period is one of such identifications, and it leads to serious transformations in social lifein line with its dynamics.The most principal effects of the globalization that result in transformations inthe social life are seen at the economic field, and this field becomes to be an arena,which includes both dangers and opportunities. Actors of that process, by the use ofcapacities they have, maintain effective strategies to get rid of dangers and enjoy theopportunities within the framework of economic rationale. On the other hand suchstrategies may have effects on each other and may create new problems that shouldbe solved urgently. One of such problems is seen at the taxation sphere, which isalmost identified as the main motivator for the creation of nation state due to its beingthe basic financer of the services provided by the state.Before all, taxation problems emerged in globalization process are ?global? incharacter. Because, relations of mutual interdependence brought by the process,enhances the effects of current problems without being obstructed by any geographiclimit. Furthermore, technological developments, that are ones of the most importantdynamics of the process, leads to variation in and reproduction of current problems.According to us, tax competition has a special place within global taxationproblems. Because, the theory of tax competition includes results that argues thateconomically competing public service providers will give up uncontrolled applicationsant so that the efficiency will increase. Moreover, special interests and attempts toprevent the tax competition without having strong and relevant arguments within theOECD and EU on the issue, makes the tax competition a more privileged theme. Onthe other hand, the tax competition can be legitimized easily within the framework offunctions attributed to competition by the dominant ideology.Exactly at this point, the main problematic of this study is to search whether thetax competition has a potential of development strategy for developed and developingcountries or not. As a challenged variable in tax competition direct foreign investmens?being mostly originated from developed countries and budget pressure stemmed fromwelfare state policies applied in such countries, makes such a critique more accurate,and some recommendations -on what kind of strategies can be maintained- arebrought for Turkey that is a developing country in the sense of tax competition.ii