Turkey announce comprehensive economic stimulus package
Tuesday, April 14, 2009
The Turkish government announced a comprehensive economic stimulus package and new regulations will lower the private consumption tax rates while the value added tax (VAT) also will be lowered from 18 to 8 percent.
The government has previously introduced three smaller packages and the Central Bank in February has lowered its benchmark interest rates to a record low of 11.5 percent. The new tax regulations seek to stimulate domestic demand in Turkey's leading industries. Industry Minister Zafer Caglayan explained the details of the reduction that the package will introduce temporary tax cuts for three months in the housing, home appliances, and automotive sectors. The VAT on apartments over 150 square meters (1,614 square feet) in size will be lowered from 18 to 8 percent. The package also foresees measures to boost exports by allocating an additional 500 million liras ($296 million) to Eximbank, a state-owned bank geared to supporting exporters.
The minister commented: "We are aiming for three things in this law, which is regarded as both a regional and a sectoral incentive: Strong competitiveness, high added-value and international competitive power. The investors will make their investments according to the new law. Following the enforcement of the law, we expect a substantial increase in foreign investments".
According to the International Investors Association (YASED) report, investors currently waiting to carry out new investments in Turkey believe that economic sentiment would shift to a more positive outlook in 2010. Turkey's city investment arena is now taking a strong hold, where huge foreign investment and new commercial activity in centers such as Istanbul are prompting some great investment opportunities in both residential and commercial property.
In a related development, Turkey held direct talks with the IMF after a long period. Although Turkey maintained that the conditions set forth by the IMF were "unacceptable" and against the country's national interests, industry experts believe that following local elections at the end of March, Turkey might finally go ahead and conclude the IMF loan agreement.
Social BookmarkingThe government has previously introduced three smaller packages and the Central Bank in February has lowered its benchmark interest rates to a record low of 11.5 percent. The new tax regulations seek to stimulate domestic demand in Turkey's leading industries. Industry Minister Zafer Caglayan explained the details of the reduction that the package will introduce temporary tax cuts for three months in the housing, home appliances, and automotive sectors. The VAT on apartments over 150 square meters (1,614 square feet) in size will be lowered from 18 to 8 percent. The package also foresees measures to boost exports by allocating an additional 500 million liras ($296 million) to Eximbank, a state-owned bank geared to supporting exporters.
The minister commented: "We are aiming for three things in this law, which is regarded as both a regional and a sectoral incentive: Strong competitiveness, high added-value and international competitive power. The investors will make their investments according to the new law. Following the enforcement of the law, we expect a substantial increase in foreign investments".
According to the International Investors Association (YASED) report, investors currently waiting to carry out new investments in Turkey believe that economic sentiment would shift to a more positive outlook in 2010. Turkey's city investment arena is now taking a strong hold, where huge foreign investment and new commercial activity in centers such as Istanbul are prompting some great investment opportunities in both residential and commercial property.
In a related development, Turkey held direct talks with the IMF after a long period. Although Turkey maintained that the conditions set forth by the IMF were "unacceptable" and against the country's national interests, industry experts believe that following local elections at the end of March, Turkey might finally go ahead and conclude the IMF loan agreement.
Labels: Economy, Latest-news
