Tax incentives to be offered to boost FX inflows: Şimşek

ISTANBUL

The government plans to offer tax incentives to boost foreign currency inflows into Türkiye, Treasury and Finance Minister Mehmet Şimşek has said.

“We will increase the tax deduction and exemption rates to be applied to some activities of income and corporate taxpayers abroad, provided that the earnings are brought to the country,” Şimşek said.

The exemption rate for earnings from architecture, engineering, software, design, data processing, education and health services activities will be raised from 50 percent to 80 percent, he added.

“Thus, we reduce the tax burden of corporate taxpayers to 5 percent for those earnings."

Taxpayers will be able to exempt 50 percent of their earnings from income and corporate taxes, provided that all of the dividends earned abroad are brought to Türkiye, Şimşek said.

Also, in order to support exports, a 5-point corporate tax reduction on their earnings will be granted to manufacturers and suppliers, the minister added.

The tax package is designed to encourage foreign currency inflows into the country and help meet the targets set out in the medium-term economic program, according to Şimşek.

“We are working on the tax policies stated in the medium-term program… we prioritize some of them, and the issue will soon be on parliament’s agenda.”

The program aims at establishing permanent price stability, supporting investments and exports, creating a competitive environment, improving the current account balance and financing the budget with sustainable resources, he said.

They will also implement structural reforms, which will increase production, competition and productivity, Şimşek added.