The Ottoman Empire successfully maintained its tax farming system, in contrast to European nations

that switched from privatized tax collection to a centralized government control system. However, the
Ottoman tax collection method was successful in its own historical context, and there is ample evidence
to refute the notion that such a system was archaic and wasteful. Considering Ottoman public finances,
institutional infrastructure, and administrative practices in a broader European context, the purpose of
this study was to discover evidence of whether the Ottoman Empire implemented a successful tax
farming system in the 19th century based on accounting records of tax farming revenues. As a result,
the current investigation made use of the records of the Revenue (Varidat) Accounting Administration,
the tax farming auctions held by the Central Council (Majlis-i Val'a), and the Prime Minister's Ottoman
Archives. The period's economic and financial conditions were also taken into account in the data
analysis. The nature of the empire's economic activities were revealed by analyzing the tax that was
collected by tax collectors in Kocaeli Province (Sancak). It is possible to state that tax collectors in Kocaeli
Province paid a total of 395,612 Guruş (Ottoman currency) in five installments over the course of three
months. The sales of alcoholic beverages were the source of the highest tax that was collected. Each
district's Adet-i Anam, or tax on sheep and goat breeding, was sold at an auction for a tax farming price
of 51,610 Guruş. The tax revenues from farming also included taxes from trade, forestry, maritime,
industrial production, and other sources. In general, the Ottoman Empire's tax farming system was
successful in collecting taxes and contributed to the development of the current Ottoman public finance
system, despite the difficult political and economic conditions at the time.

Introduction Although tax farming—the practice of delegating tax collection duties to individuals seeking
financial gain—was widespread in most European nations prior to the 19th century, the French
Revolution and the Napoleonic Wars led to the decline of this form of privatization. However, the
Ottoman Empire continued to tax farming as an efficient method of generating revenue from
agricultural production, domestic and international trade, customs procedures, and agricultural trade.
Tax farming was primarily associated with direct taxes on agricultural production as well as indirect
taxes like customs duties in the Ottoman case (zbek, 2018). This was in addition to the fact that it
continued throughout the century as an essential mechanism of an extensive revenue collection system.

European economic historians have been looking at historical trends in the financing of liberal states and
the various paths to modern public finance systems, comparing the relationship between nations'
financial performances and institutional environments in recent years. When it comes to the formation
and consolidation of modern fiscal states, Europe exhibits clustering, but closer examination of each
nation's circumstances reveals their distinct differences. Understanding an excellent fiscal state and its
public finance system requires broad and adaptable concepts in light of national experiences. The
increasingly privatized governmental technologies of the neoliberal era have also encouraged a critical
rethinking of our approaches and concepts, in addition to these conceptual needs (Zbek, 2018). Taking
into account Ottoman public finances, institutional infrastructure, and administrative practices in a
broader European context, this study aimed to reveal evidence of whether the Ottoman Empire
implemented a successful tax farming system in the 19th century based on the accounting records of tax
farming revenues. The practice of awarding the right to collect particular taxes to the highest bidder is
known as tax farming. The money that was collected was then kept by the tax collector. When private
marginal revenue and marginal cost are equal, a winning bidder would operate in order to maximize
profits. According to Stella (1993), tax farming is a private finance solution to the state's tax collection
issue.
According to previous research (Karaman & Pamuk, 2009), approximately two-thirds of the net tax
revenues were distributed to tax collectors in the provinces, money changers, and high-level
bureaucrats participating in tax farming auctions in the capital city and sharing all tax resources among
themselves in the Ottoman Empire of the 18th century. In the 19th century, after deducting the costs of
tax collection, only 24% of the remaining revenue was distributed to collectors; the remaining 30% was
distributed to guarantors (Buluş, 2010).