Deputy Minister Babacan: Turkish Government Plans No Tax Increases
The Turkish government does not plan to impose an additional tax hike, according to Deputy Prime Minister Ali Babacan.
Speaking on CNNTürk news channel Friday morning, Babacan said fiscal policy measures do not mean only tax hikes. “We do not plan any increase in any taxes. If there will be some fiscal policy measures, it may mainly be about [increasing] savings,” Anatolia news agency quoted him as saying.
The government expects great income from the restructuring of public receivables, according to Babacan, who said that income, which will enter the state’s coffers this year, constitutes a great fiscal policy instrument. “The use of cash collection in debt payments would be an important fiscal policy measure. Additional measures may be realized,” he said. “A part of this income may also be used for investment spending. We may direct them to investments that will increase Turkey’s competitive power and improve infrastructure.”
Developments in the banking sector are continuously followed, he also said. “If necessary, additional measures can be taken [against loan growth]. This is a dynamic process.”
The minister noted that especially in the last two months, there has been a small decline in the expansion rate of loans. He reiterated the government target of capping loan growth at around 20-25 percent.
Independence controversy
Treading in the footsteps of Prime Minister Recep Tayyip Erdoğan, Babacan warned against independent regulators “that have become politicized,” speaking on a program on the Kanal A channel on May 4. Commenting on independent regulators, such as the Energy Market Regulatory Agency, Babacan said that presidents of these institutions “should not play a politician’s role.”
These institutions also include the Banking Regulation and Supervision Agency, the Capital Markets Boards and the Tobacco and Alcohol Market Regulatory Agency. Nearly all of them were established in the aftermath of the 2000-2001 economic crisis.
If a problem occurs concerning the policies of these institutions, “people call the prime minister or the related minister to account,” Babacan said. “We attach importance to the existence of these institutions. But a separation is needed between issues which the political will should decide on, and issues to be handled independently.”
Erdoğan had made a similar statement on May 3, speaking at a meeting held by the Confederation of Businessmen and Industrialists of Turkey.
“Do you know what the mentality of an independent institution is? If there is a success, then it belongs to them, but if there is a failure, then it is attributed to politics,” Erdoğan had said. “Why should we pay for their mistakes in front of the people? People do not consider whether these independent institutions are useful. It is said that these institutions are independent. But who sets the price of fuel oil? This is determined by the free market, not by us.”
Friday, May 6, 2011
SOURCE: HURRIYET DAILY NEWS
