In recent years, there has been a significant increase in the Post-Clearance Control and Secondary Control audits conducted by the Ministry of Trade. Thanks to AI-supported risk analyses, big data applications, and digital audit infrastructures, past import and export transactions are being re-examined. Additional tax assessments and administrative fines amounting to billions of liras are being issued for transactions where it is suspected that taxes were under-assessed. In this context, it has recently been announced to the public that billions of liras in additional assessments and penalties have been applied.
The state’s objective of preventing tax loss is entirely legitimate. However, in a state of law, what matters is not merely imposing fines, but imposing lawful fines. This is the core issue that needs to be discussed today.
The penalty figures amounting to billions of liras announced to the public are often perceived as finalized public revenue. However, the reality is quite different.
A significant portion of these additional assessments is challenged in Tax Courts, Regional Administrative Courts, and the Council of State. Courts frequently annul these administrative actions due to several reasons, including:
-
Incorrect HS Code (GTİP) determination
-
Incomplete examination
-
Erroneous valuation
-
Procedural violations
-
Violation of the right to defense
-
Insufficient technical justification
Therefore, the initial assessment amounts announced to the public do not entirely represent finalized public revenue.
Every annulled transaction does not merely affect the respective company; the primary cost falls on the public. During the litigation process, various expenses are directly covered by the public budget, including:
-
Court expenses and expert fees
-
Costs of the administration’s legal department
-
Personnel, postal, and notification expenses
-
Attorney fees
-
Refunded taxes and interest payments
In other words, every transaction determined to be unlawful by a court decision leads to the unnecessary consumption of public resources.
Article 2 of the Constitution explicitly states that the Republic of Turkey is a state governed by the rule of law. Furthermore, Article 125 of the Constitution stipulates:
“Recourse to judicial review shall be available against all actions and acts of administration.”
This provision guarantees that every administrative act exercising public power is subject to the scrutiny of an independent judiciary. In its established jurisprudence, the Council of State continuously emphasizes that the administration’s discretionary power is not absolute, and that its actions are subject to judicial review regarding their authority, form, cause, subject, and purpose. Thus, the objective of an auditing public official should not merely be to issue a penalty, but to establish a lawful administrative act.
Performance in public administration is frequently measured by the number of reports issued, the total amount of fines levied, and the volume of audits conducted. However, there is a far more critical indicator: The rate of transactions upheld by the courts.
Issuing 100 fines only to lose 70 of them in court is not a success. Conversely, executing 50 transactions and having all of them withstand judicial scrutiny aligns much better with both the principle of the rule of law and the public interest.
We are proposing not to punish public officials, but rather to enhance institutional quality. Within this framework, the following criteria should be evaluated:
-
The rate of transactions annulled by the courts.
-
Institutional analysis of the legal grounds for finalized annulment decisions.
-
Monitoring of recurring errors stemming from the same causes.
-
Identification of personnel training needs.
-
Strengthening of internal audit mechanisms.
This approach champions a preventive, rather than a punitive, understanding of public administration.
Under current legislation, there is no provision stating that additional assessments or customs penalties annulled by courts are automatically recorded in the personnel file of the public official who issued them. However, to strengthen the principle of accountability in public administration, the following question must be debated: Should administrative acts determined to be unlawful by finalized judicial decisions be factored into the institutional performance evaluations of the relevant units?
In our view, the answer is yes. The goal is not to penalize the staff. The true goal is to prevent the recurrence of the same legal mistakes, mitigate public loss, avoid unnecessary litigation burdens, and protect public resources. Just as faulty decisions in the private sector are analyzed within quality management systems, annulled transactions in public administration must become a core component of institutional learning.
Unlawful administrative actions inflict widespread damage:
-
They disrupt the investment environment.
-
They diminish foreign investor confidence.
-
They increase financing costs for companies.
-
They reduce the competitiveness of exporters.
-
They unnecessarily inflate the workload of the judiciary.
Consequently, the damage incurred is not just uncollected tax. The real damage is lost time, eroded trust, and wasted public resources.
In numerous rulings, the Council of State highlights that acting in accordance with the law, subjecting discretionary power to judicial review, and ensuring the legal scrutiny of administrative acts are fundamental elements of the rule of law. Specifically, decisions by the Plenary Session of the Tax Law Divisions and the Administrative Law Divisions of the Council of State affirm that the judicial review of administrative actions is an indispensable safeguard of public administration.
Preventing tax loss is undeniably the duty of the state. However, in a state of law, the ultimate goal should not be how many fines are issued, but how accurate and lawful those fines are. Every additional assessment and administrative fine annulled by a court demonstrates not only that the taxpayer was right, but also that public resources were squandered.
Therefore, performance evaluations must no longer rely solely on the monetary value of fines issued. They must incorporate the rate of court-approved actions, grounds for annulment, recurring legal errors, and training and quality metrics.
A strong state is not one that issues the most penalties; it is one that executes actions most strictly in accordance with the law. This is the true essence of the rule of law.
