Finance Minister Zekeriya Temizel announced on 6 December the details of a new tax reform package to be introduced on 1 January, and seen as directed at winning the support of the IMF. The package aims to increase tax revenues by bringing the informal economy within the tax net through a new personal number system modelled on US practise.

Economists say the government may find it difficult to push the tax package through parliament in time, particularly considering that debate on the 1998 budget will take up much of the second half of December. However, planned new taxes on equities and fixed income instruments led to falls in the Istanbul Stock Exchange's National-100 share index, and to increases in bond and bill yields in secondary trading on 8 December.

The main points of the package are:

all Turkish citizens will be given tax numbers enabling the authorities to monitor financial transactions, such as property acquisition, money transfers, credit card expenses, and vehicle purchases through registrations

individuals will have to submit wealth declarations, including the assets and property of next-of-kin

individual gains from investments in securities, including stocks and repurchase (repo) instruments, will be taxed equally

lump sum tax assessments will be replaced with taxation on real income

the first income tax bracket for salaried employees will be lowered by five percentage points to 20 per cent on 1 January, and cut further to 15 per cent in 1999

taxes on real estate will also be lowered, but declarations will be tightened up to two-year intervals instead of four-year intervals

fines will be increased and imprisonment introduced against defaulters.