Taxation of wage income at declaration method in terms of tax justice: Developed country practices and recommendations for Türkiye

The aim of this study is to reveal the tax injustices that wage is subjected to against other income types with the final taxation of wage by withholding method and to provide recommendations to ensure justice for Turkey by examination of developed countries that practice the declaration procedure in different methods in wage. For this purpose, in the first chapter of the study, the concepts of tax justice and wage and the positive and negative consequences of taxation methods of wage, namely declaration and withholding taxation, are examined within the framework of some tax principles for both the taxpayer and the tax office. In the second chapter, the taxation of wage in Turkey and the third chapter, the practices of the USA, Switzerland and Germany are examined in detail. These three countries were selected because they practice the declaration procedure in wage under different conditions. During the creation of country practices, the first sources, laws and legislation, were examined. In the continuation of the third chapter, the final withholding procedure in Turkey and the practice the declaration procedure of these three countries as mandatory declaration with withholding, mandatory declaration only and voluntary declaration with withholding, are evaluated by comparing them with various statistical data. As a result of these evaluations, it is understood that the final taxation of income tax through the withholding method creates tax injustice against the taxation through the declaration method. The fact that wage, which is final taxed by withholding method, does not have the opportunity to deduct expenditures from income as in the declaration method, and that there are limited deductions, prevents the actual ability to pay and causes the tax burden to remain on wage. In the practices of the countries examined, it has been revealed that the completion of the withholding procedure with the declaration procedure creates equality in the taxation method by enabling the taxpayer who earns wage to reach the ability to pay. In line with this result, due to withholding tax is the final practice in Turkey taxpayers who earn wage bear the tax burden, therefore taxation through the declaration method in addition to the withholding method has been proposed. All these studies were conducted using mixed research methods.