No plans for new tax hike this year, says deputy PM

ANKARA - Hürriyet Daily News

Ali Babacan (R) is seen with Belgian Crown Prince Philippe in this file photo. The government will not loosen spending to win more votes, Babacan says. AA photo

The Turkish government plans no further tax hikes this year, Deputy Prime Minister Ali Babacan said in a televised interview yesterday.

“There is no further measure planned [to meet budget and inflation targets] this year. We may take some minor steps in various fields next year,” Babacan told national broadcaster NTV.

He also signaled that the government would not be loosening spending in an effort to win more votes. “The most important subject that we have to be careful about is to protect the stability [in public finance]. Our priority is to go to the polls with a strong macro economic outlook rather than spending a lot of money widely to win over particular voters,” Doğan news agency quoted Babacan as saying.

The main goal of the Medium Term Program for 2013 and 2015 is to increase savings both in the public and private sectors, he also said, adding that the government planned a number of steps to encourage firms to keep profits within the firm rather than distributing them as dividends.

The insurance industry will be very important to increase savings in the upcoming period, Babacan said, adding that the government was currently preparing “very interesting” developments to prop up this industry. “Accordingly, we estimate the savings ratio to be 14.3 percent in 2012, 15 percent in 2013,” he said.

Meanwhile, the Central Bank revealed yesterday that the market expectation for year-end consumer inflation was 7.29 percent, according to the second survey in October. The figure is in line with the government’s expectations of 7.4 percent.