According to Bloomberg, Türkiye’s economic authorities are considering reducing the withholding tax on deposits and investment funds in response to recent economic developments. Sources close to the matter indicate that the Ministry of Treasury and Finance has been evaluating alternative economic measures to counter potential market fluctuations following the arrest of Istanbul Metropolitan Municipality (IBB) Mayor Ekrem Imamoglu.
Supporting the Turkish Lira Through Lower Tax Rates
One of the key measures being discussed is lowering the withholding tax rate on deposits and funds to support the Turkish Lira (TL). Meetings led by Treasury and Finance Minister Mehmet Simsek have focused on assessing the impact of previous economic policies while also considering a range of new strategic steps.
Previous Withholding Tax Hikes on Deposits
On February 1, Türkiye raised withholding tax rates on term deposits, with the following adjustments:
- For deposits with maturities up to 6 months: Increased from 10% to 15%
- For deposits with maturities up to 1 year: Increased from 7.5% to 12%
- For deposits exceeding 1 year: Increased from 5% to 10%
The Ministry of Treasury and Finance has not yet commented on the potential tax reductions.
Source: Bloomberght/ Prepared by: İlayda Gök