Rating of tax income and its sub-items in turkey to GDP (1998-2008) and comparison those rates with OECD and EU countries? values (1965-2007) and tax fraud in Turkey using ?false tax base declaration?

In the first chapter of this thesis the share of budgetary incomes and all its main constituents? in GDP (1998-2008) are analyzed and using original data supplied by the Incomes Administration Department (GİB) of the Turkish Ministry of Finance. These GİS data are presented in Appendix 1 and summary tables derived from the original data are presented in the text of the thesis.The second chapter presents comparisons of eight selected OECD countries as well as the averages of OECD, EU-15 and EU-19 countries and of Turkey in terms of the share of budgetary incomes and all its main constituents? in GDP, between 1965-2008. Original OECD tables were used, which tables appear in Appendix 2 while summary tables derived from the original data are presented in the text of the thesis.The third chapter starts with a summary of the ?public finance problem? in turkey which manifests itself in share of budgetary incomes, total tax-revenue and income-tax revenue in GDP, which shares, in Turkey are nearly twice as low as those observed in OECD, EAU-15 and EU-19 averages. The chapter then moves on to a definition and description of the two main sources of this ?problematique? : (i) the income-tax schedule (the marginal tax rates and the income-classes they are applied to) is extremely non-progressive. İt starts with applying a 15% marginal rate on the Minimum Wage bracket and ends up by applying a 35% marginal tax rate on all incomes over and above 50,000TL (about 30,000 USD) annual before tax income. An example to an income tax schedule possessing progressive characteristics was prepared and the average tax rates derived from it were calculated and presented both in tabular and graphical forms. (ii) Using, both, a micro analytic approach on basis of original GİB -data and a macro analytic approach utilizing National Income data, it was shown that about 1.6 million proprietors operating in the non-agricultural sector in Turkey, routinely claim that their before-tax earnings are (on average) only about 5% of their ?true but unreported before tax earnings. If these two problems were solved simultaneously, we estimated that the present income-tax receipts from these 1.6 million proprietors, which at present amount to a ludicrously low 0.035% of the GDP will be increased very substantially, yielding a whole gamut of positive results not only in terms of the reducing the public-deficit (as distinguished from the budget-deficit), but also in terms of helping reverse the deteriorating tendency of the income-distribution and in terms of enabling increases in much needed public investments in human and social overhead capital..Key Words;1.Tax Fraud2.False Tax3.Tax Base4.Tax Income5.GDP