- Pre-Accession-Economic-Reform-Program-2023-2025-

Fiscal Framework
Bahadır Emre Alparslan
193201021

AHMET DİNÇER
İKT-431
The Fiscal Framework in the Economic Reform Program (ERP) 2023-2025 focuses on several
key areas to ensure financial stability and growth in Türkiye. The main objectives and
strategies are outlined as follows:

1. Fiscal Policy Objectives (2023-2025):

Reduction of Public Deficits: Gradual reduction by maintaining budget discipline and
strengthening the financial structure.
Growth and Sustainability: Contributing to growth potential, inclusive and sustainable
economic wealth distribution, keeping the current account deficit sustainable, and promoting
domestic savings and investments.
Monetary Policy Compliance: Ensuring fiscal policy aligns with monetary policy targets.
2. General Government Balance:
Prepared based on policy priorities and actions included in the Medium Term Programme
(2023-2025) and the Presidential Annual Program for 2023.
Includes a range of institutions, local administrations, social security, and other funds.
Focuses on transparent and comprehensive accounting practices for expenditures and
revenues.
3. Fiscal Policy Strategy and Medium-Term Objectives:
Revenue Policies: Enhancing international economic competitiveness, ensuring a safe
environment for investors, supporting domestic savings, and ensuring price stability. Tax
incentives will be reviewed, and tax legislation will be updated to be more understandable and
applicable.
Digital Economy and Tax Collection: Emphasis on understanding and taxing the digital
economy effectively, improving tax collection, and fighting against the informal economy.
Behavioral Public Policies: Developing policies based on taxpayer behaviors to increase tax
compliance and collection.
4. Expenditure Policies:
Public Expenditure Policy: Executed in line with policy priorities and appropriation ceilings.
Focus on maximum savings in public services and control of expenditures.
Social Security and Public Health: Strengthening the financial sustainability of social security
and health services, improving efficiency in service delivery, and enhancing information
systems.
State Economic Enterprises (SEEs): Ensuring SEEs operate in line with macroeconomic,
sectoral, and social policies.

5. Debt Management:
Sustainable, transparent, and accountable debt management aligned with fiscal and monetary
policies.
Borrowing mainly in Turkish Lira (TL) and decreasing the share of domestic debt in foreign
currency.
Strategic benchmarking policy for managing public debt effectively against various risks.
6. 2022 Budget Review:
Significant increases in budget expenditures due to personnel costs, foreign exchange-
protected deposits, energy subsidies, and other needs.
Budget revenues exceeded initial estimates due to positive impacts of inflation and domestic
demand.
The budget deficit to GDP ratio for 2022 was revised to 3.4% from an estimated 3.5%.
7. Capital Expenditures:
Expected increases in capital expenditures due to additional demands and investments in
infrastructure.
8. Tax and Non-Tax Revenues:
Increases in tax revenues from corporate tax, VAT on imports, and non-tax revenues from
interests, shares, and penalties.
The recovery in economic activity and easing of Covid-19 effects significantly impacted these
increases.
9. General Government Revenues and Expenditures:
Decrease in general government revenues and expenditures as a percentage of GDP in 2021
and 2022.
The general government deficit to GDP decreased in 2021.
10. 2023 Budget Forecast:
Significant increase in central government budget expenditures.
The budget deficit is expected to be 3.5% of GDP.
11. 2023 Revenue Estimates:
Increases in both tax and non-tax revenues are expected.
The ratio of central government budget total revenues to GDP is predicted to be 20.4%.

12. Fiscal Discipline and Efficiency:

Emphasis on controlling public expenditures and increasing efficiency.
Revision of incentive and support practices to ensure effective use of public resources.
Overall, the ERP 2023-2025 focuses on fiscal discipline, efficient use of resources, enhanced
revenue collection (especially in the digital economy), and strategic debt management to
support sustainable economic growth and stability.

BAHADIR EMRE UĞURU