Turkey has unveiled a sweeping fiscal reform that includes a new 0.03% transaction tax on cryptocurrency trading, aimed at alleviating budget deficits exacerbated by seismic events in 2023. This move signals a significant shift in Turkey's financial transaction policies, responding to economic challenges exacerbated by inflation and currency volatility.

According to Bloomberg reports citing official projections, the transaction tax on crypto trades is projected to generate approximately 3.7 billion liras annually. This measure targets the burgeoning popularity of cryptocurrencies among Turkish retail investors, who increasingly turn to digital assets as a hedge against the devaluation of the lira and rampant inflation.

The Ministry of Treasury and Finance, under Mehmet Simsek's leadership, has drafted legislation for parliamentary deliberation by the end of June. This reform package, anticipated to yield 226 billion liras ($7 billion), represents about 0.7% of Turkey's GDP and constitutes the most extensive tax revision in two decades.

Previously, the Turkish government had denied intentions to tax crypto and stock gains but now seeks to implement targeted transaction taxes to bolster financial regulation comprehensively. Mehmet Simsek underscored the government's commitment to broad-based taxation, stating on June 5th, "We aim to tax every area to ensure fairness and effectiveness in taxation."

However, the proposed transaction tax faces potential political hurdles despite President Recep Tayyip Erdogan's ruling party's parliamentary majority. Past attempts to introduce such levies have encountered significant opposition, suggesting contentious debates ahead over the scope and impact of these fiscal measures.