Business Urge For Tax Reduction, Incentives

Representatives of different sectors expect the government direct public resources to profitable sectors; establish cooperative banks in agriculture; reduce stoppages in the construction sector, and lower taxes in the automotive sector.

İzmir

Representatives from leading sectors of the Turkish economy expressed their immdiate expectations from the new government.

Sadrettin Bagci, an economist from Ata Investment, said, "In the banking sector, first of all, a medium of trust needs to be established."

Here are Bagci's comments:

The Yapi Kredi issue needs to be finalized

* If the new government were successful in handling economics, the return of credits back to the bank would be accelerated.

* This would help banks recover from the capital shortage they are suffering from right now. Interest rates would fall to acceptable levels, which would lead to increased investments, and thus, contribute in the accelerated

growth of the economy.

* In Turkey, public sector utilizes the majority of the resources. So much that, they still have hope in the banking sector to help them. The banking sector is already suffering from a shortage of resources in financing public sector's debts.

* The new government should take important steps in the financing and expenditures of the public sector. That way, the resources can be utilized for financing investments that would benefit the economy, instead of for paying the debts of the public sector.

* Besides the macro-economic developments, the new government should finalize the issue of Yapi Kredi Bank. Their attitude on this issue will also be very important for financial circles.

"Rural development should be a priority"

Rifat Akyuz, the head of Turkey's Union of Agriculture Chambers, listed the expectations of the agriculture sector:

* The new government should back the establishing of a cooperative bank to finance the agriculture sector,

* The pricing system in agricultural products is currently disadvantageous for producers. This should be fixed,

* The farmers should be under the scope of the Social Insurance Organization for the Self-Employed (Bag-Kur),

* The product prices should be determined before the beginning of the October period,

* Besides the Direct Income Support, there should be other means of supporting farmers. The means of supporting farmers in the European Union (EU) countries could be examples.

"Stoppages should be reduced"

Sukru Kocoglu, head of the union of Turkish construction industrialists and employers, accounted for the main problems of the construction sector. Construction sector makes orders to more than 300 side-sectors:

* The Public Bid Law that will be in effect in January 1, should be regulated in such a way to lead to increased business activity.

* The allocations should not be granted at the end of the year.

* The process of nationalization should be finalized so that the construction activities can be run effectively.

* The five percent stoppage cut from merits should be reduced to 2.7-3 percent.

* The value added tax owed by state administrations to contractors working for the state, should be entered into the accounts of the companies' tax or social security payments to the state.

* The workers in the construction sector are faced with high risks. The Labor Law dictates that three percent of the employed workers should be disabled. This percentage should be lowered.

"The taxes should be reduced to acceptable levels so that the sector can revive," said Prof. Dr. Ercan Tezer, the general secretary of the association of automotive industrialists.

The taxes should be reduced, exports should be encouraged

Tezer wants the "taxes to be reduced after political and economic instability is overcome."

"Currently, more than 50 percent of automobile prices are comprised of taxes," said Tezer. "Our prior request from the government is to reduce this percentage to 20-25 as it is the European Union countries."

Altan Atam, the general secretary of the association of household appliances industrialists (BEYSAD), said, "Despite the crisis, production in the first nine months of the year 2002 went up 24 percent compared to the year 2000."

"65 percent of the products were exported," he said. According to Atam, "the main problems of the sector are the obstacles to exporting products."

"We are expecting the new government to take decisions in the year 2003, that would support the sector's export activities," said Atam. "Our main problem is exporting. We believe that if the tax rate, which is at 18 percent right now, is reduced to 6-8 percent, the demand would increase."

"The state should not interfere in the income of industrialists"

Umut Oran the head of the association of Turkish clothing industrialists (TGSD), said, "we are expecting the new government to put the manufacturing sector on the agenda. They should ensure employment, exports and stability."

Arslan Sanir, the general secretary of the union of machine producers said, "the state should quit getting money from the industrialists to pay their debts."

Sanir wants the income taxes paid by workers and the social security premiums to be reduced to EU levels. "They should not suspend the creation of qualified industry zones (QIZ) just because the textile sector is not under the scope of those zones," said Sanir. (NK/BB/EA/NM)