Erdoğan unveils Economic Reform Package

* Photo: Murat Çetinmühürdar / Presidency

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President and ruling Justice and Development Party (AKP) Chair Recep Tayyip Erdoğan unveiled the "Economic Reform Package" in a publicity meeting in Haliç Congress Center in İstanbul today (March 12).

In his 50-minute speech in the meeting, Erdoğan said that the package "aims to boost investment, production, jobs, and exports."

He argued that Turkey's transition from a Parliamentary System to the Presidential System "saved the country from a fragile political climate."

Underlining that macroeconomic and structural policies underlie the economic reforms, President Erdoğan said, "Within the frame of macroeconomic stability, we focused on public finances, inflation, financial sector, current account deficit and employment."

"We will achieve our goals by working day and night to make Turkey one of the world's top 10 economies," Erdoğan said, adding that "Turkey weathered the 2009 global economic crisis, post-2013 crises in both politics and economy and will keep its 2023 targets within reach."

A thrifty perspective

As reported by the state-run Anadolu Agency (AA), in unveiling the Economic Reform Package, President and AKP Chair Erdoğan stated that Turkey's first target is setting a stronger public finance structure to guard against risks, with fiscal discipline as the top priority of the country.

The share of foreign exchange in the country's total debt stock will be cut to reduce its sensitivity to external shocks, Erdoğan said.

He underlined that savings in public administration will be expanded such as limiting vehicle rentals and hospitality costs.

"In addition to the central government, we aim to create a thrifty perspective in local administrations as well," Erdoğan indicated further.

Noting that the government knows the difficulties small business owners have been struggling with during the pandemic, he said that the reform package also includes a tax exemption for low-income tradespeople:

"We will be exempting approximately 850,000 tradespeople subject to small business taxation rules, such as hairdressers, plumbers, haberdasheries, carpenters, lathe makers, tea shop operators, tailors, and repairmen, from income tax, and we will remove their tax filing obligations."

Easing taxes, public-private partnerships

A digital tax office will be established which will operate 24/7 to enable the public to carry out their transactions in the digital environment without personally visiting a tax office, according to Erdoğan.

"We have also included the tax problems faced by international investors within the reforms," he noted, adding that the country is revising double taxation avoidance agreements to prevent possible problems.

Erdoğan also said that a public-private sectors cooperation law will be enacted: "It will enable us to ensure that investors deal with a single law, to strengthen the legal infrastructure of projects, to introduce priorities among sectors and projects, and to make processes more foreseeable."

Stressing that one of the priority agenda items will be the fight against inflation, he said that Turkey aims to bring inflation down to single digits.

An early warning system will be established that will ensure the flow of data in order for the Food Committee to form policy recommendations and ensure that the market operates effectively. In order to increase foreseeability in agricultural production and prevent price fluctuations, contractual agricultural mechanisms are being developed, he stressed.

Turkey is preparing uniform legislation that will accelerate the development of the participation financing sector, President Erdoğan said, adding, "A Central Advisory Board for the sector will be set up while the participation financing sector will be gathered under a single roof."

A participation financing arbitration mechanism at international standards will be established, he underlined further.

Banks

Turkey is working on creating economic, technological, and legal infrastructure for digital currency, Erdoğan said, briefly adding, "We will be making the relations between banks and their customers more transparent by establishing a surveillance mechanism that will protect consumers."

Indicating that the Individual Private Pension System is being expanded to a much broader segment of society, Erdoğan noted, "We are removing the barriers for children under age 18, who constitute 25 percent of our population, from entering the system."

In order to develop an innovative and powerful healthcare industry, a Healthcare Industries Presidency will be established, he said, adding, "This department will be in charge of the competitive development and production of many strategic materials, from pharmaceuticals to vaccines, from medical devices to biotechnological products, using domestic means."

Underlining the need for software technologies to become competitive in the economy, to access the right data, to analyze data, and to develop the most suitable solutions, President and ruling AKP Chair Erdoğan said that Turkey will found a Software and Hardware Industries Presidency to gain global competitiveness and encourage youth employment.

"These two new structures will nourish the domestic ecosystem and bring a new edge to our country by helping boost rates of domestic goods and services in the fields of healthcare and software, just like the defense industry," Erdoğan underlined further. (HA/SD)