A proposal for to the problem of intergovernmental revenue sharing in Turkey: The use of taxes on motor vehicles

The intergovernmental fiscal relation consists of the division of task and revenue sharing. Central government and local governments are two important agents of the service delivery within the public sector. They need to share their income sources that obtained from the same community as they serve the whole society. However, it is observed that, with the division of task, thanks to local governments, the central government eases the burden and increases its power; and with the revenue sharing, central government keeps efficient resources under its domination and transfers inefficient resources to local administrations. The failure of a balanced distribution of tasks and revenues intergovernmental prevents local government units from providing quality, effective and effective service. Local governments should have sufficient income sources to meet the increasing demands and needs quickly and effectively. In this study, local governments' financial problems have been identified by examining the laws and budget realizations regarding local governments in Turkey through employing the qualitative research methods, which acquire scholarly data by analyzing written documents. It is aimed to benefit from the taxes on motor vehicles to fix the financing problem of local government resulting from the income distribution that makes local governments financially dependent on the central government. Accordingly, it has been proposed to collect the motor vehicle tax as a local tax and adopt the number of automobiles per capita criterion for distribution of special consumption tax number (II) list revenues to local governments. The use of motor vehicle tax as a financing source of local governments in many countries, the high level of service provided by local governments to motor vehicles, the existence of problems such as environmental pollution and crowding costs that the local people endure, the provision of conscious and voluntary tax payments with the service-cost relationship are indeed support the inclusion of motor vehicle tax among the financing sources of local governments. In addition to being difficult to manage local taxes by local governments, it is important that they do not disturb the macroeconomic balance, do not cause deviations in income distribution, do not waste resources, and do not lead to resource deviation by creating a tax burden difference among local governments. Keywords: Decentralization, Revenue Sharing, Division of Task, Motor Vehicle Tax, Special Consumption Tax.