Leasing Sector Pleased with New Machinery Strategy of Turkey

A new machinery strategy plan announced by the Industry Ministry earlier this week will boost the leasing sector due to tax cuts, according to representatives of the hiring sector.

“The Turkish leasing sector will return to its business volume of $8.2 billion in 2008 with these decisions,” Mehmet Sevinç, marketing manager of İş Finansal Kiralama, a Turkish leasing company, told the Hürriyet Daily News.

Commenting on the tax cut on machinery leasing and renewed time advantages on value added tax, or VAT, return process, Sevinç said, “We hope the plan does not stay on paper as just another election promise.”

The current business volume of the leasing companies is at around $3.2 billion, according to the professional.

­“Many customers have been waiting for such a tax return revision to purchase machinery for so long,” said Gökçen Doğan, leading manager of Bank Asya Leasing. More customers will start purchasing goods due to the new VAT benefits suggested the strategy document, she said.

Turkish Trade and Industry Minister Nihat Ergün said Tuesday that Turkish machinery exports could be increased to $100 billion by 2023. According to Doğan, the domestic leasing sector might accelerate its growth with such steps forward.

The document promised the VAT rate would be decreased to 8 percent from the current 18 percent gradually in sales of all types of the machines and related equipments, as the tax on leasing machinery would be reduced to 1 percent.

The strategy plan also suggested several incentives to encourage owners of five- to 25-year-old tractors to replace their vehicles with new ones.

In addition, the country’s Exim Bank is supposed to offer a series of long and short-term credits to foreign buyers to purchase Turkish machineries, according to the document.

Thursday, May 5, 2011
SOURCE: Hürriyet Daily News