Temettu was a tax introduced by the tanzimat reforms in the later Ottoman Empire.[1] [2]
Temettu was a tax on estimated (or presumed) business profits; it was mostly paid by merchants and artisans. An early form of temettu was attempted in 1839 (following a firman of 1838 which announced sweeping tax reforms), but it was impractical without detailed information on business incomes. A comprehensive approach to taxation of business profits in the Ottoman empirerather than the traditional method of taxing specific outputs or assetsonly really became possible after a thorough cadastral survey was carried out from 1858 to 1860, which collected detailed information on the status of businesses throughout the empire. Immediately after this, a new temettu was set at 3%; in 1878 it was raised to 4% of estimated profit.
In 1886 the temettu was increased to 5%, and it was also applied to wages and salaries; for most of the Ottoman empire, this was the first real income tax, in the modern sense.[1]
Temettu was paid annually;[3] it was a graduated tax, with the rich liable to pay considerably more than the poor. By 1910, temettu revenue had reached 1 million livres per year; the same as tobacco and petrol duties, and less than the revenue from customs.[4]
After early attempts at taxation, farmers who did not participate in commerce were eventually exempted from temettu. They paid other farm taxes instead, such as a new form of âşâr which was imposed as part of the same tax reforms.[5] Foreigners were initially exempted, but there were later attempts to extract temettu payments from foreigners resident in the Ottoman empire. This extension of temettu was abolished in 1906[6] but later reinstated at the start of World War I and extended to foreigners in any profession.[7]