Corporate tax cut in the 2027 budget proposal and reactions from the labor world
While the 2027 budget proposal projects forgoing 1.1 trillion liras in tax expenditures by reducing the corporate tax rate to 12.5 percent, unions and experts have reacted against this policy.
According to the 2027 budget proposal, the corporate tax rate is projected to be reduced to 12.5 percent, and 1.1 trillion liras in corporate taxes will be forgone under tax expenditures. While this regulation has caused a reaction among labor representatives and unions, calls were made to fight against injustices in taxation policy.
In the 2027 budget proposal, it is projected that 1.1 trillion liras in corporate taxes will be forgone next year under tax expenditures. As for wage earners, the income tax exemption is applied only to the minimum wage amount, which remains 26 percent below the starvation threshold. While the budget expects 2 trillion 223 billion liras from corporate taxes and 3 trillion 284 billion liras from citizens' Special Consumption Tax (SCT), a 171 percent increase is projected in SCT revenues from petroleum and natural gas products. Meanwhile, 5 trillion 681 billion liras are written under the Value Added Tax (VAT) column on the citizens' shoulders. The budget proposal did not include the demands of unions for exempting wages below the poverty line from taxes and for regulating tax brackets.
Ahmet Karagöz, Co-President of the Confederation of Public Employees Trade Unions (KESK), stated that when it comes to the public, taxes and penalties are enforced, whereas when it comes to bosses, incentives, tenders, and tax exemptions are put into effect, arguing that resources collected from segments struggling with the cost of living are transferred to bosses. Özkan Atar, DİSK Vice President and President of United Metal-İş, stated that 29.9 percent of a metalworker's gross wage in 2026 was paid as tax and SSI deductions, and that net wages decreased due to entering the 27 percent tax bracket in the middle of the year, adding that they will fight against this. Şahin Başraner, President of the Highway Transport Workers Union (KATAŞ-SEN), also noted that the budget is a political choice and that the organized struggle of workers is essential for a fair tax system.
Prof. Dr. Uğur Emek stated that companies benefit from competitive tax rates through investment incentives, credits, VAT, SCT, stamp, customs, and corporate tax exemptions, and that Turkey collects 10 percent of its GDP less in taxes compared to OECD countries, a situation that relies on consumption and social security shares.