Union of Chambers and Commodity Exchanges of Turkey

The “Conference on the Importance of Combating Illegal Trade” organized by TOBB was held at TOBB Twin Towers with the participation of Trade Minister Mehmet Muş.

In his speech at the opening, Hisarcıklıoğlu stated that the fight against the illegal economy is the focal point of development and that effective cooperation of public institutions, the business world and academics is necessary because it concerns the whole society.

Hisarcıklıoğlu emphasized that they will talk with the representatives of the fuel, beverage, tobacco, electronic device sectors and academicians who are among them today about what needs to be done in the fight against illegal trade, “These sectors have an important share in the development of our country with their employment, exports, public income and high value-added production powers. For this reason, we started our first conference with these sectors. In the meetings we have planned as a conference series with our Ministry, we will continue to discuss separate product groups.”

Hisarcıklıoğlu, pointing out that illegal trade is a comprehensive problem, listed the reasons for this as follows: “First of all, it is smuggling, trademark-patent violation, tax evasion. It disrupts countries, public finances and fair competition. It also poses a threat to public health and public safety. It also creates an unfair competition environment in terms of sectors and traders who continue their activities on a legal basis. It is also a threat to labor peace. It disturbs the peace and trust among the employees. In tax revenues, it causes significant losses.”

- “Tax revenue loss from 4 sectors has exceeded 50 billion TL”

Stating that the loss of income due to illegal trade is more than estimated, Hisarcıklıoğlu reported that the loss of tax revenue due to 4 sectors here alone exceeded 50 billion TL.

Hisarcıklıoğlu, stating that this corresponds to almost 1 in 4 of the 2021 SCT revenues, said, “In other words, illegal trade causes a very significant loss in public revenues. The most important element for our business world is to be able to compete under the same conditions. However, companies that remain unregistered significantly reduce the competitiveness of our companies conduct business honestly.”

Hisarcıklıoğlu underlined that it is not possible for anyone to accept such an unfair competition environment, and said that Türkiye, under the leadership of President Recep Tayyip Erdoğan, has made significant progress in the transition to the formal economy.

Hisarcıklıoğlu also drew attention to the measures taken recently by Trade Minister Mehmet Muş and said that the Ministry of Interior, the Ministry of Treasury and Finance, the Ministry of Agriculture and Forestry and law enforcement agencies are in an all-out struggle.

Pointing out that the transition from traditional methods to digital has accelerated in this process, Hisarcıklıoğlu said, “Concepts such as e-invoice, e-waybill, e-expense compass have been implemented, export declarations have been moved to the digital environment, stock monitoring has been made instant with EMRA automation systems, and e-document applications have been integrated with the State Registration System.”

- “There are limits, thresholds, rates in tax that should not be exceeded”

Hisarcıklıoğlu, emphasizing that many other activities continue successfully, stated that the fight against illegal trade is a continuous issue.

Stating that since the world is changing very fast, they need to constantly monitor the process and improve themselves, Hisarcıklıoğlu said that digitalized processes increase productivity on the one hand and lead informal companies to develop different methods on the other hand.

Hisarcıklıoğlu, pointing out that for this reason, legislative regulations should be combined with technological developments, continued as follows: “We should create an infrastructure for monitoring and effective management of data with the contribution of all our institutions. We must maintain inspections resolutely and strictly. This is where cross-agency data and information sharing comes to the fore. On the other hand, we cannot ignore that every tax increase increases off the record economy. I studied economics, and the first thing we learned there was that 'too much tax kills tax'. In other words, there are limits, thresholds, rates that should not be exceeded in tax. If they are exceeded, we run the risk of collecting less when we say 'let me collect more taxes'. Therefore, our aim should be both to implement lower tax rates and to design the tax system in a simple and understandable way. Measures should be taken to expand the tax base. From this point of view, there is a need for a fundamental and structural reform of the tax system.”

Hisarcıklıoğlu emphasized that as TOBB, they provide all kinds of support to public institutions in terms of contributing to legislative regulations and raising awareness, and said that they have given a very comprehensive and detailed opinion to the “Action Plan to Combat the Informal Economy” to be announced by the Ministry of Treasury and Finance.

Hisarcıklıoğlu, reminding that they provided “Anti-Smuggling in Export Training” with the Ministry of Trade, chambers and commodity exchanges last year, said, “In some assemblies within our Sector Councils, we are also working on the issue in terms of legislation by establishing sub-commissions on smuggling. We convey to our public institutions all our suggestions that can prevent smuggling and illegal trade. Hopefully, with the cooperation and solidarity of all institutions, we will be in a much better position in the fight against illegal trade.”

- Minister Muş

Trade Minister Mehmet Muş said that they continue to work without slowing down and meticulously in all areas and throughout the country to prevent illegal trade.

Stating that the Ministry has sanctioned the technical infrastructure, human capital and administrative capacity over 1 billion liras in the last 10 years with the awareness that the fight against smuggling is based on strong technical, human and administrative capacity, Muş said, “As a result of these efforts, I would like to express with pleasure that as a result of the anti-smuggling activities carried out by our Customs Protection teams, we have seized a total of 10.7 billion liras worth of contraband goods as of December 2022.”

Muş said that fuel smuggling is an extremely important problem in terms of Türkiye's economy and security, human and environmental health, and that issuing and using fake invoices has been one of the most frequently subject areas of financial irregularity in the country in the past.

Minister Muş pointed out that tobacco and tobacco products are another sector that causes serious tax losses and unfair competition and that they are resolutely focusing on, and made the following assessment: “The new irregularities detected recently have made an effective audit mechanism essential in this field. Accordingly, we have implemented the Tobacco Special Team in coordination with the relevant ministries. The Tobacco Special Team caught 24 million pounds worth of products such as macaroons and cigarette filters. In addition, the General Directorate of Customs Enforcement of our Ministry seized 205 million liras worth of tobacco and tobacco products in 2022.”

Minister of Trade Muş pointed out that the irregularities in electronic products also disrupted the market operation and said, “In this context, within the scope of the fight carried out by our Ministry in the field of electrical and electronics smuggling, we have realized 5.3 million seizures worth 738 million liras in 2020-2022. In 2022, 1 million products worth 332 million liras were captured.”

Emphasizing that in the last three years, among the types of electrical and electronic goods, mobile phone type goods stand out in terms of the number of incidents (51 percent) and the capture value (37 percent), Muş said that the Retention Integration System established within the scope of the technical work carried out by the Ministry and the Information Technologies and Communication Authority in order to prevent irregularities in bringing mobile phones to the country other than the declaration of passengers within the scope of the fight against mobile phone smuggling,  He stated that it entered into force as of November 1 and started to be used at customs gates.

Muş reported that in coordination with the Ministry, in cooperation with the Information and Communication Technologies Authority and mobile phone operators, measures such as the deactivation of IMEI of mobile phones by BTK when necessary were put into provision in order to narrow the cloning IMEI pool. Muş informed that they will implement service-based clone analysis as of the new year in order to detect cloned mobile phones, and said that they will make it difficult to clone while protecting IMEI numbers.

Stating that they will facilitate legal trade in the fight against smuggling while facilitating illegal trade, Muş said that they will continue the coordination between all institutions for the effective fight against smuggling.