State to take 99 liras of its 110-lira of minimum wage support in taxes

Hacer Boyacıoğlu-ANKARA

AA Photo

The Turkish state has announced it would give employers 110 Turkish Liras per employee to decrease the burden of the minimum wage raise, while it will also tax around 99 liras per employee, in effect only slightly decreasing businesses’ burden. 

The minimum wage will increase from 1,000 liras to 1,300 liras starting at the beginning of this year, after fairly heated negotiations between politicians and the business world. The move is expected to cost the private sector around 20 billion liras ($9.2 billion), leading critics to warn of job losses. 

In an effort to appease businesses, the government said it would offer some 40 percent of additional costs from this raise and vowed to give employers 110 liras for each worker. This support will be made thanks to cuts in social security premiums in 2016, which will be covered by the Turkish treasury, according to officials.
 
However, in addition to its support, the government will charge businesses an additional 99 liras in taxes for each employee. 

These taxes will increase in October unless current tax regulations are effective, when income tax for minimum wage earners will rise to 156 liras, leading to 70 liras of decline in wage. 

Labor and Social Security Minister Süleyman Soylu has said a joint program will be launched with the Finance Ministry until October to keep the income tax for minimum wagers the same.