Turkey Set To Cut Corporate And Personal Income Taxes
The Turkish government has stated its intention to cut a series of taxes next
year in a bid to boost foreign investment.
In an announcement made on Tuesday, Prime Minister Recep Tayyip Erdogan revealed
that the corporate tax rate will be cut to 30% from 33%, whilst indirect taxes
on food, health products and education will be slashed to 8% from 18%. The programme of tax reform, designed to simplify the tax system and increase
compliance, will also see the top rate of personal income tax fall to 35% from
40%. These changes will go into effect from January 1, 2005. In addition, further reforms will see a much simplified system for the taxation
of financial instruments put into place from 2006. At present, taxes on bank deposits,
shares and investment funds are levied at various rates from 7% to 24%. "Our purpose is to establish a tax system to reduce the unregistered economy
and to collect taxes more efficiently," declared Erdogan. "Our government is confident it would not lose any tax revenue as a result
of the cuts because lower rates would push down tax evasion," he added. .
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