Savings politics in Turkey applied post-1980 and the effects of tax system on directing savings into investments

As a concequence of economic development, several ideas andarguments have been proposed about the concept of saving in economicsystems. Althought there are different definitions of saving we can in generaldefine it as the part of the individuals income which is not spent.There are several different classifications of saving like, compulsory-volunteer saving, institutional-personel saving domestic-foreing savingetc. In developing countries, as a result of low national income, the mostimportant determinants of savings are compulsory saving and foreingsavings. In this kind of countries increasing the total amount of savings andconverting them into investments are the most important issues. However, indeveloped countries, besides increasing the amount of saving, efficientusage of this source is also an impotant issue.For the accumulation of savings, there are several incentivemechanisms. There are arguments about the efficiency of thesemechanisms. So the effects of different policy tools on savings must beexamined carefully. Among all of these policy tools, the incentives that existin the tax system are the most important ones in affecting the compositionand level of the savings.In this study the role of the Turkish Tax System in accumulation of savingsand converting them into investments will be examined. First of all exemptions,allowances and tax credits will be exlpained according to the different tax subjetsand then the economic effects of these incentive mechanisms will be discussedwith an econometric model. A part from these, some other arrangements, whichwere designed in different legistations will be analyzed.As a result, a new stretegy in which the inefficient incentives areabalished and efficient ones extents are enlarged will be proposed.