Ticimax/Çiğdemli: Withholding Tax Implementation on E-Commerce Will Constrict the Industry

In the new system, a withholding tax will be applied to all sales made by sole proprietorships, joint-stock companies, and limited companies through e-commerce platforms, at an undisclosed amount. The withholding tax will be calculated on the sales amount excluding VAT. TOBB E-commerce Council Member and Founder CEO of Ticimax E-commerce Systems, Cenk Çiğdemli, emphasized that if the withholding tax rate is around 15%, as discussed in the corridors, it would have a significantly negative impact on e-commerce and increase consumer inflation. "This rate must definitely be lowered. Although this withholding tax will be temporary and offset in income tax declarations, it should not exceed 1%. Everyone will want to raise prices according to the tax rate they will pay on their products. This will obstruct affordable shopping in e-commerce," he said. Çiğdemli also pointed out the positive aspects of the withholding tax decision, stating, "Sellers who do not want to pay withholding taxes will opt to open their own websites instead of using marketplaces, allowing them to continue without upfront withholding payments, using the normal taxation method. Why is the increase in the number of websites in e-commerce positive? Because there is no branding opportunity in marketplaces. Branding can only be accomplished through a website. Sellers who can promote their sites to the world through all advertising channels will also have the opportunity to become a brand and own their data." He remarked that the withholding tax application, with its pros and cons, could constrict the e-commerce sector, stating, "But in the medium to long term, it will encourage our country to develop into brands. However, after leaving the marketplace, businesses will need to learn to manage their advertising investments, social media usage, and traffic. It is critical for our businesses to quickly start using omnichannel e-commerce, not just in marketplaces. We provide these trainings for free within the Ticimax Campus."