Evaluation of tax expenditures within the framework of Turkey and selected OECD countries

Tax expenditures are expressed as income that is relinquished due to the application of exemptions or special tax regimes designed to support or encourage certain economic sectors, activities, regions or intermediaries. States achieve their goals for social and economic life through tax expenditures. Today, with the understanding of the social state, there is a need for a lump sum side as well as the return aspect of the tax. Tax expenditures are also on the lump sum side of the tax. In this direction, many countries resort to tax expenditures in terms of their targets. Turkey is one of these countries. For these reasons, the main problem of the study is to compare and evaluate the tax expenditures in Turkey with the tax expenditures applied in other selected OECD countries. The aim of the study is to consider the tax expenditures in Turkey and other selected OECD countries comparatively, and to reveal an idea about the size and scope of tax expenditures in the countries. According to the data in the study, Finland is the country that spends the most tax according to its GDP among the selected OECD countries. The country that spends the least tax according to its GDP is Spain. Turkey, on the other hand, is the seventh country with the highest tax expenditure according to its GDP among the 10 OECD countries together with Mexico. Among the selected OECD countries, the USA, Finland and Turkey allocated the largest share to tax expenditures for income tax. According to the data obtained as a result of this study, although the share of tax expenditures in the GDP in Turkey remains low compared to the general average, it is concluded that tax expenditures are used as an effective alternative policy tool in Turkey compared to these countries because the share of tax expenditures in tax revenues is above average and leaves behind many developed OECD countries in the study.