Development of tax expenditures and emerging markets: Comparison of Turkey and Latin America

Social structure needs the state which is the highest political structure responsible for the administration of society with its various duties and responsibilities and based on its sovereign power on behalf of ensuring its order and continuity. The state carries out many economic, social and political public services in order to maintain the vital activities of the society by adopting policies in line with various purposes such as ensuring social order. The state both applies to fiscal policies for many economic and political purposes as well as social purposes and get involves in social life with its services in areas such as justice, security, education and health ın line with its classical functions. Fiscal policies are implemented by making use of tools such as public expenditures and public revenues. The state needs a financing for the public services that performs. The state receives again a large part of this financing from the public through the taxes that is needed for public services. Although taxes are an indispensable element of a society and state, the income-reducing effects of taxes on individuals and groups can be negative in economic and social terms. In such cases, the state provides an implicit incentive to the society for both economic and social purposes by reducing the tax burden on individuals or groups. These tax expenditures are realized through practices. Although tax expenditures are a financial instrument with the characteristics of public expenditure, they are not included in public expenditures. The state gives up some of the taxes it will collect for tax expenditure purposes through individuals or groups who are granted tax privileges through applications such as exemptions, exceptions and discounts. Taxes, which are the most important resource used to cover the cost of social services, have collection costs. Instead of indirectly subsidizing a part of the revenues they receive due to their responsibilities, the state can opt for giving up the taxes that they will receive directly. In this way,instead of taking the tax firstly and resort to redistribution, they give up the taxes in a certain criterion which they will take by excluding bureaucracy and costs. Tax expenditures can have different meanings for each country conceptually and structurally and can be described differently. While the developed countries use their tax expenditures mostly to provide balance in the market with the aim of economic stability, developing countries use them for the purpose of providing economic development due to the effect and increase of economic decisions such as investment and expenditure. The perspectives of countries on tax expenditures or the calculation and reporting methods may differ. In this study, it will be examined whether the policies implemented by the state have been reviewed in accordance with the financial objectives of resource distribution, such as justice and economic prosperity, by voluntarily giving up one of the most important sources of income taxes. This means that the rates of tax expenditure policies over the years, whether they achieve results for their purposes, and the impact on justice in tax and resource distribution. The aim of the research is to analyze the positive or negative consequences of the changes by reviewing tax expenditures in emerging markets, including our country and especially our country. Study consists of three main sections: "Tax Expenditures within the Framework of the Tax Concept", "Development of the Concept of Tax Expenditure and Emerging Markets" and "Tax Expenditure Practices in Emerging Markets: Turkey and Latin American Countries". In the first part, tax and tax burden will be discussed to form a basis for tax expenditures which are the main concept of our study. Then, the first emergence and development of the concept of tax expenditures in the global sense will be examined and it will be examined whether it is compatible with taxation principles or not. After that, the concept of emerging market economies, including our country, will be discussed. The developing market classification will focus on the concept and development of tax expenditures similar to our country in Latin America. In general, the comparison between our country and the selected countries shows that tax spending is prioritized in Latin America.