The effects of VAT harmonisation with the EU on the Turkish economy: a CGE approach

Turkey has recently applied to become a member of the European Union (EU). The ultimate goal is full membership of the EU and with this application Turkey is obliged to undertake changes to the structure of the economy as a means of preparing for membership. Turkey's integration into the EU will result in the strict adoption of certain EU principles. In particular, all applicants are expected to adopt EU fiscal structures, for example the use of VAT as the main turnover tax. With regard to this, Turkey introduced VAT in 1985 even before her membership and followed the developments in the EU as far as VAT harmonisation is concerned. [Continues.