The taxation dimension of banking proceedings and its influence on credit valuation

The banking sector is one of the most important sectors in term of theeconomy of a country. Strong and permanent economic stability is possibleonly dynamic and powerful banking sector.The main duty of the banking sector is to mediate. The mediation inquestion becomes a reality between those who supply fund and those whodemand fund. Banks? duty is also to do transaction such as fund transfering,revenue procedures and payings aside from mediation.Banking sector of which main function is to mediate is dependent uponobligations and tax-burden in the process of performing its so-called function.The fact that obligations and tax-burden are high prevents that banks performactive banking. The Turkish banking sector has entered into the process ofinflation which has decreased and has been decreasing after the period ohhigh inflation for more than 20 years. Dynamic banking is, on the other hand,probable with the low mediation costs.In our country, political and economic stability have been reached withthe general elections in 2002. The recorded profit margins and the decreasingreal interests have led the banks to active banking. By being observed themediation costs, some mediation ones upon which bank re dependent havebeen eliminated. Nevertheless, there have been still mediation costs that willbe considered high on banks.There are important differences resulting from obligations and tax-burdens between the interests which are paid to those supplying funds andthe ones paid to those demanding funds. The situation under discussionleads both those supplying funds and those demanding funds to anotherthing except banking sector.It must be started from process taxes which have demolishing effectsin putting away the mediation costs on banks in terms of the continuing of theprovided economic stability. The fact that the profits obtained at the end of theterm which is the final result of the transactions are the subject of tax insteadof the taxation of the transactions in banks will make a contribution to thegrowth of the sector and thus economy. However, unrecorded cases will havereduced, unfair competition will have prevented and lasting and powerfuleconomic stability will have provided via the banking sector in which there islittle tax lost and leakage thanks to decreasing mediation costs.Key Words: 1)Credits, 2)Taxes, 3)Cost, 4) Banks, 5) Valuation.