President Erdogan unveils “reform package” to improve Turkey’s struggling economy

President Recep Tayyip ERDOGAN unveiled a reform package in a meeting he held in Istanbul aiming to improve investment, production, jobs, and exports which are observed to display a poor performance for quite a while.

The President said, “Turkey’s primary goal is to create a stronger public finance structure to protect against risks and fiscal discipline as the country’s top priority.” ERDOGAN also added the share of foreign currency in the country’s total debt stock would be cut to reduce its sensitivity to external shocks.

The President went on to say the government would pay much more attention to ensure that public administration savings would be expanded, such as limiting car rental and hospitality expenses

Based on his expressions it is understood the government plans to ensure same perspective applies to local administrations.

On the other hand the President also referred to the difficulties experienced by small business owners since the beginning of the pandemic in particular and said “We are aware of the challenges small business owners faced during this time. The reform package also includes tax exemptions for low-income traders.”

He went on to say, “We will exempt about 850,000 tradesmen subject to small business taxation rules, such as hairdressers, plumbers, haberdashers, carpenters, tea shop operators, tailors and repairmen from income tax and abolish their tax filing obligations.”

President ERDOGAN also shared their plans in regards to easing taxes and public-private partnerships saying a digital Tax Office would be established, which would work 24/7 to enable the public to perform their transactions in a digital environment without visiting the tax office in person.

He said, “We have included in the reforms the tax problems faced by international investors” adding that the country was reviewing its agreements to avoid double taxation to overcome possible problems. He added, “This will allow us to ensure that investors deal with a single law and strengthen the legal infrastructure of projects, identify priorities between sectors and projects, and make processes more predictable.”

Inflation has been one of the major issues Turkey has been trying to cope with for a long while. The President referred to this topic in his speech. Emphasizing the priority item on the agenda will be the fight against inflation, he said that Turkey aimed to reduce inflation to single digits.

He went on to say “An early warning system will be set up for the food Committee to make policy recommendations and ensure the data flow to ensure the market operates effectively. Contract farming mechanisms are being developed to increase unpredictability in agricultural production and prevent price fluctuations.”

Stating that Turkey has prepared a uniform legislation that will accelerate the development of the participation finance sector, President Erdogan said: “while the participation finance sector is gathered under one roof, a Central Advisory Board will be established for the sector. A participation finance arbitration mechanism will be established in international standards.”

Regarding the situation with banks ERDOGAN shared following: “We will make relations between banks and their customers more transparent by establishing a surveillance mechanism that will protect consumers. Turkey is working to create an economic, technological and legal infrastructure for the digital currency, as well.”

On the other hand he referred to the social security system and shared following: “The Individual Private Pension System is being expanded to a much broader segment of society. We are removing the barriers for children under age 18, who constitute 25 percent of our population, from entering the system.”

“Some expert opinions about new economic package unveiled by President Erdogan”