Turkey is keen on VAT reform

Published on : Thursday, August 3, 2017

Turkey re-establishesTurkey is all focused to regulate its value-added tax management or VAT to ease pressure on various corporations and boost investment, as confirmed by the Finance Minister Naci Agbal to Reuters.

 
This revamping will start from next year onward which Ankara is looking for. Also, this initiation happened due to the push by President Tayyip Erdogan’s ruling AK Party to speed up the growth and win back the assurance of the investors after the failure of the coup in 2016 and a comprehensive crackdown since.

 
As we know, Turkey’s financial condition is dominated by tourism, construction, automotives and textiles. This increased at a better-than-expected 5 percent in the first quarter of this year, assisted by a quick rise in government spending. On the other hand, economists have warned that development in private investment will not be strong whatsoever. Therefore, financial expansion could stop once Ankaraeases off the stimulus.
“Current VAT law is a financial burden for companies and creates a deterrent effect for investment,” Agbal said in an interview in Ankara late on Tuesday. “We are working on alternatives to relieve the burden on taxpayers.”

 
At present, Turkey has three different VAT rates: 1 percent, 8 percent and 18 percent.”A company buys an intermediate product at 18 percent VAT and sells the final good at 8 percent VAT. The difference causes an additional burden on the producer,” Agbal said.

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