Turkey Identifies ₺748bn in Undeclared Taxable Income as Audits Hit Record Highs

Türkiye’s Treasury and Finance Ministry has identified ₺748 billion ($23bn) in undeclared tax base following an unprecedented expansion of tax audits, underscoring the government’s intensified campaign against the informal economy. The audits resulted in ₺294 billion in additional tax assessments and penalties, according to Finance Minister Mehmet Şimşek.

Record Findings from Expanded Tax Audits

Data released by the Vergi Denetim Kurulu (VDK – Tax Inspection Board) show that audit activity accelerated sharply last year, producing the highest figures in the institution’s history.

Through a combination of tax inspections, explanatory summonses, compliance monitoring and on-site audits, the VDK uncovered:

• ₺748bn in undeclared tax base

• ₺294bn in assessed taxes and penalties

The audit coverage rate rose to 6.72%, more than doubling from 2.91% in 2024, reflecting a significant broadening of enforcement efforts.

Focus on Large and Previously Uninspected Taxpayers

Tax inspections alone generated ₺469bn in tax base discrepancies, leading to ₺101.6bn in tax assessments and ₺172.6bn in penalties. Roughly 90% of the total tax base difference stemmed from audits of large and medium-sized taxpayers, the ministry said.

Of this amount, ₺325.3bn came from general audit findings unrelated to fraudulent invoicing, targeting areas with high collection potential.

Notably, three out of every four taxpayers audited had not been inspected at any point in the previous five years, allowing authorities to redistribute the compliance burden more evenly across the tax base.

Treasury Starts 2026 with a Deficit: Interest Burden Tightens Its Grip on Public Finance

Voluntary Compliance and Explanatory Summonses Reach New Highs

The number of taxpayers invited to provide explanations under the “explanatory summons” mechanism surged to 51,356, triple the level recorded a year earlier.

This process resulted in:

• ₺86.8bn in additional declared tax base

• More than ₺6.3bn in accrued taxes

Both figures marked record highs for this compliance channel.

The ministry also rolled out new monitoring and voluntary compliance programmes, reaching 135,000 taxpayers. As a result of guidance provided by tax inspectors and voluntary disclosures, declared tax base increased by ₺136.8bn.

On-Site Audits and Physical Inventory Checks

In cooperation with local tax offices, on-site inspections led 31,309 taxpayers to file amended tax returns. This generated roughly ₺55bn in additional tax base and ₺8.5bn in new tax assessments.

Tax inspectors also conducted 1,415 physical inventory counts nationwide as part of enforcement efforts.

Şimşek: Strategy Combines Enforcement with Guidance

Finance Minister Mehmet Şimşek said the results reflected a balanced strategy focused on both deterrence and voluntary compliance.

“We will maintain this approach going forward,” Şimşek said. “By combining technology, qualified human resources and risk-based analysis, we aim to strengthen public finances by increasing voluntary tax compliance.”

He added that the government remains firm in combating the informal economy while prioritising guidance and preventive mechanisms over purely punitive measures.

“We are determined in our fight against informality, while encouraging voluntary compliance through a strategy that emphasises guidance and prevention. I congratulate our tax inspectors for their dedicated work,” Şimşek said.

Fiscal Signal Ahead of Budget Discipline Push

The sharp increase in tax audit findings comes as Ankara seeks to reinforce fiscal discipline amid tight monetary policy and ongoing efforts to rebuild policy credibility. Analysts say the emphasis on broadening the tax base—rather than raising headline tax rates—could help support budget revenues without further straining household demand.