The Rule Providing For The Return Of A Part Of The VAT Paid To The Special Account Is Unconstitutional
Subject Rule
The rule stipulates that a portion of the value added tax (VAT) paid by the Spor Toto Organisation (STBB) will be transferred to a special account opened in the name of STBB to be used for investment and operating expenses.
Grounds for the Request for Cancellation
In the application, in summary; it was argued that the return of a part of the VAT to the special account opened in the name of STTB to be used in investment and operating expenses is contrary to the principle of non-allocation, and that the expenditure of budget resources using special accounts without being subject to the provisions of basic financial legislation prevents the use of the budgetary right belonging to the Grand National Assembly of Turkey and that the rule is unconstitutional.
Evaluation of the Court
The levying of taxes according to the financial capacity of taxpayers to cover all public expenditures without any individual benefit is the result of an obligation, not a preference. Accordingly, public services for which individual benefit cannot be measured should be financed mainly by taxes paid by taxpayers according to their financial capacity. Taxes will be collected as the anonymous equivalent of all these services and will be used to finance these services. Taxpayers will also benefit from these services together with the whole society, although they do not receive any individual return. Therefore, taxes should not be allocated to the financing of public services whose benefits are not spread to the society.
STTB carries out the activity of playing fixed odds and joint betting games on sports competitions in Turkey and abroad according to the principles of private management. The increase in the upper limit of the STTB bonus distribution rate with the change in the phrase made in Article 4 of Law No. 5602 has caused a financing deficit in terms of investment and operating expenses. In order to meet this financing deficit, the subject rule stipulates that a portion of the VAT paid by STTB will be transferred to a special account opened in the name of STTB to be used for investment and operating expenses, and this is stated in the justification of the rule.
VAT is one of the taxes subject to the principles set forth in the Constitution. Therefore, in addition to other principles, it is also subject to the principle of tax being a provision for public expenditures and is collected according to the financial capacity of taxpayers.
Like other taxes that are paid by taxpayers according to their financial capacity, VAT is paid as an anonymous provision for the purpose of financing public services that are carried out according to the principles of general administration and provided to the whole society, the benefits of which are spread to the whole society, and based on the social benefit derived from them. STTB, which is a VAT payer, benefits from these services together with the whole society. Like other taxes, VAT, once paid by the taxpayer, should be transformed into an anonymous provision to be used in the financing of all public services shown in the budget within the budget discipline.
In the rule subject to the case, by allocating a portion of the tax paid by the taxpayer to the financing of the expenditures of this taxpayer, the tax has lost its characteristic of being an anonymous provision as required by the rule and has turned into a provision taken for the financing of a service carried out according to private business principles. This situation is incompatible with the principle that the tax is a provision for all public expenditures.
In terms of this contradiction, there is no difference between the allocation of the tax paid by other taxpayers to a certain service and the allocation of the tax paid by a certain taxpayer to the service provided by him, as in the subject rule.
For the reasons explained above, the Constitutional Court decided that the rule is unconstitutional and cancelled.
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