Evaluation of the Turkish tax system in terms of fiscal function of taxation

As of historical development, the tax is as old as the history of civilization, and it is a concept that maintains its importance every phase. Significant changes have occurred in the functions of the taxes, which constitute the most important source of income for the states. Classical economic system argued that the state should have a neutral position in the economy and only collect enough taxes to finance public expenditures. Welfare economics which are advocated by modern economists argue that taxes in an economy should administer the economic and social functions as well as fiscal function. The priority objectives of the states in taxation are administer of the fiscal function of taxation. The fiscal function of taxation states that it acquisitions enough income for the financing of public goods and services. For the administered of a fiscal taxation, a tax system which both focusing on the objective of income acquisition and considers to the economic and social priorities must to be created. This study, was make to assess whether the Turkish tax system is in compliance with function of taxation. For this, the Turkish tax system was analyzed with the help of data which reflecting its financial performance and structural characteristics. In addition, international comparisons were made using the tax burden datas and indirect-direct tax rate of OECD member countries. As a result of the study, it is determined that the Turkish tax system does not administer its fiscal function of the tax due to the low tax burden, the excess of interest payments because of debt raised, defiency of tax effort, increased tax expenditure, the magnitude of the shadow economy and the structure based on indirect taxes and deduction at the source that are improperly formed to tax equity. Key Words: Tax, Fiscal Function of Tax, Principles of Taxation, Turkish Tax System