Lutfi Elvan, Minister of Treasury and Finance, spoke at the Gaziantep Business World Meeting. In his statement, Minister Elvan drew attention to a double-digit growth figure in the second quarter of the year and said, “We expect a growth of around 20% in the second quarter.” Underlining that there has been a significant acceleration in vaccination in recent weeks, Minister Elvan said, “I think this situation will bring revival to the services sector, especially tourism, in a very short time.”
Minister Elvan pointed out that global activity started to recover after a difficult year in the Covid-19 process, and said, “The sectoral recovery has not spread to the base. Even if the economic activity is alive, there are some structural problems brought by the epidemic period, one of them is the pressure of global inflation. With the effect of extraordinary monetary expansion, drought, increasing stocking trend with the epidemic and disruptions in the supply chain, commodity prices started to increase all over the world.”
“WE WILL CONTINUE TO TAKE ADDITIONAL STEPS ON MEASURES”
Stating that the developments put pressure on monetary policies, Elvan said, “Even a sentence conveyed by the Fed through verbal communication can cause a sudden fluctuation. The weak course of the service sector puts pressure on employment. Throughout the process, we have taken measures for all segments affected by the epidemic. We will continue to take additional steps regarding the measures. There has been a significant acceleration in vaccination in recent weeks, I think this situation will bring a revival to the services sector, especially tourism, in a very short time.”
“WE EXPECT A GROWTH AROUND THE LEVEL OF 20%”
Emphasizing that Turkey will see double-digit growth figures in the second quarter of the year, Minister Elvan said that they expect a 20% growth in the Turkish economy in the second quarter of 2021. Elvan said, “With the effect of the regulations we made in February, we started to see a significant slowdown in gold imports. We do not see any problems in the current account deficit this year, provided that domestic demand continues under control and tourism revenues increase. We have set a budget deficit target of 3.5% relative to national income for this year. We will never hesitate to use the financial space for our citizens, and while doing so, we will not deviate from our medium-term goals. Growth, balance of payments and public finances show positive signals, the problem is inflation and the volatility of the exchange rate. We cannot talk about growth and prosperity without low inflation and exchange rate stability and price stability, which the country needs. Less uncertainty for investment, therefore price stability is essential.”
“WE WILL NOT HESITATE TO TAKE MACRO PREVENTION MEASURES IF NECESSARY”
Highlighting the importance of the Central Bank’s determined stance focused on price stability, Minister Elvan said, “Disciplined and predictable policies will bring success in the fight against inflation. We do not see the fight against inflation only from the perspective of monetary policy, our fiscal policy and structural policy support price stability. We will not hesitate to take macroprudential measures if necessary.”
“WE WILL MAKE SIGNIFICANT CHANGES TO THE TAX PROCEDURE LAW”
Stating that there is a need for a quality growth path and a more equitable income distribution, Elvan said, “For all these, we have to get rid of high inflation. Production, employment, investment and export are our indispensable four pillars. We have introduced data exceptions and incentives to support these areas. “We will make significant changes in the tax procedure law.”
Expressing that evaluations were made regarding the regulation of economic activities, Elvan said, “We will make a regulation regarding the application of the 50% corporate tax reduction in cash capital increase to 75% in case the increased capital is brought from abroad. We have made an increase in the tax base, it will be possible to increase the tax base for income tax, corporate tax, income, corporate, withholding and VAT taxes for the years 2016-2020. There will be no tax review for tax types so we want businesses to focus on the future rather than the past. Those who want to take advantage of these opportunities must submit their applications by the end of August. The issue of providing long-term and affordable financing to our companies is on our agenda.”
“YOU CAN BENEFIT FROM THE 2-POINT CORPORATE TAX IMPLEMENTED TO PUBLIC OFFERING COMPANIES”
Minister Elvan said, “We are working to strengthen the capital structure of our companies by facilitating public offerings. We do not only face banks, we also have capital markets, the interest of investors and companies in capital markets has increased significantly. With 21 public offerings, the size of the public offering was over ₺11 billion. You can strengthen your capital structure by providing equity financing through public offerings. You can benefit from the 2-point corporate tax imposed on companies that offer public offerings.”
Source: Sabah / Translated by Irem Yildiz