Fiscal illusion and their effects: The case of Turkey

The phenomenon of fiscal illusion is expressed as an incomplete estimate of the tax price, which constitues the cost of public financing due to the lack of transparency of taxes and similar public revenues, resulting in an increase in demand for public goods and services, increasing public spending and tax obligations. Based on this, the purpose of this study is to measure the existence of a fiscal illusion in Turkey, for this purpose, the data items in some of the provinces for the period of 2006-2020 various direct and indirect tax collection and tax revenue data compiled by first considering the values of the Herfindahl-Hirschman ındex, the ratio of direct and indirect tax revenues to the latter two basic methods was carried out within the calculation of an ındex. The results of the Herfindahl-Hirschman ındex show that the tax item with the highest HH ındex is a gambling tax, and the tax item with the lowest ındex is an income tax, although it varies over certain periods. However, the total value of the HH ındex of indirect taxes is quite large compared to direct taxes, and on average, direct taxes have a proportional distribution of 34% and indirect taxes 66%, indicating that the fiscal illusion was observed in Turkey during the examined periods.