Turkey Coalition Government Mulls Tax Cuts

by Lorys Charalambous, Tax-News.com, Cyprus

02 November 2001

The Turkish Daily News has reported that Turkey's Deputy Prime Minister Mesut Yilmaz has called for tax cuts or delays in the tax collection to help the economy weather the global recession. 'Certain taxes should be slashed or their collection delayed even temporarily,' Yilmaz told his Motherland Party's (ANAP) parliamentary group meeting earlier this week.

ANAP's Finance Minister Sumer Oral has said that studies are currently taking place into reducing VAT rates that could be effective during the last two months of the year. The economy can not afford a longer-term VAT cut.

The Turkish Union of Chambers and Commodities Exchanges (TOBB) representing industry, exporters and other sectors has also called for cuts, particularly on the highest 26 percent 'luxury' tax on white goods and cars.

However, Economy Minister Kemal Dervis has opposed any plans to inject any government funds into the economy because he claims that public finances should be tightened next year. Yilmaz criticised the disjointed nature of economic management and said it should be addressed in order to more effectively implement ways of boosting the economy. He said his proposed measures would be advantageous in two ways: 'One is to expand markets' liquidity and improve competitiveness. Consumers will thus gain access to cheaper goods and services because costs will fall.'

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