Steps to support economy reach $29 billion: Minister

ISTANBUL

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The Turkish government’s steps to support the economy in the face of the coronavirus pandemic have reached a value of 200 billion Turkish Liras ($28.7 billion), Finance Minister Berat Albayrak has said.

“The total value of the steps we have taken so far has reached 200 billion lira,” Albayrak said in a video posted on his Twitter account on April 25.

President Recep Tayyip Erdoğan initially announced a 100 billion lira package to support the economy on March 18, postponing debt payments and reducing tax burdens in some sectors. Since then, Ankara has gradually widened such measures.

Turkey’s parliament ratified a bill on April 16 to alleviate the effects of the novel coronavirus on economic and social life.

The support measures are applicable to people who lost their jobs after March 15. The government is already paying 60 percent of staff salaries of firms forced out of business due to “force majeure” incidents such as the COVID-19 pandemic.

Under the new omnibus bill, employment contracts cannot be nullified for a three-month period except in unconscionable situations.

Turkey will also pay 39.2 Turkish Liras (about $5.7) per day for three months to workers forced to take unpaid leave due to the coronavirus outbreak.

Among the measures, financing amount to 107.4 billion lira has been provided to some 120,000 companies to support them during the outbreak, Albayrak said.

An additional 16.8 billion lira has been provided in support to shop owners, he added.

Also, 1,000 lira in financial support has been paid to each of 4.4 million families, with a total of 22.3 billion lira set aside to meet the basic needs of some 4 million citizens, according to his remarks.

The government announced that over two million taxpayers’ value-added tax (VAT) and premium payments - totaling some 53.6 billion liras ($7.9 billion) - were postponed for six months.

Also postponed were the income taxes of 1.9 million who faced a force majeure, as well as the payments and declarations of taxpayers aged 65 and above.

Accommodations taxes, previously scheduled for this Summer, were also delayed until January 2021.

For their part, banks postponed principal and interest repayments of firms facing cash flow disruptions, and provide additional financing support.

Companies affected by the outbreak will be allowed access to cheap loans on the condition that they retain employees.
In a measure to support exporters, banks will provide support funds for stocks, in order to protect their capacity utilization rate.

Another measure to bolster liquidity doubled the limit of the Credit Guarantee Fund, while the maximum credit viability rate for house loans was raised from 80 percent to 90 percent to support the construction sector.

The government-backed credit insurance limit was also raised from 25 million liras ($3.7 million) to 125 million liras ($18.5 million).

State lenders announced a low-interest credit package of up to 10,000 liras ($1,477) for households with monthly incomes under 5,000 liras ($740).