President Recep Tayyip Erdoğan announced that new tools will be put into use to stop the fluctuation in the exchange rate and ensure relative stability. With the new tools, it will be possible to reach the possible return of the foreign currency by keeping the Turkish Lira assets.
Erdoğan explained how the new tool will work, which will enable the possible return of the foreign currency to be achieved by staying in Turkish lira assets, the new regulations for exporters and other economic measures:
1- EXCHANGE DIFFERENCE ON TL DEPOSIT
“Our people will get this return if the deposit gain of the Turkish Lira asset in the bank is higher than the exchange rate increase, but if the exchange rate return remains above the deposit earnings, the difference will be paid directly to our citizens. Moreover, this income will be exempted from withholding tax.”
“We will also launch tools that will ensure that TL assets are used in a way that does not create a new foreign exchange demand. Therefore, from now on, there will be no need for any of our citizens to switch their deposits from Turkish Lira to foreign currency because 'the exchange rate will be higher'.
2- EXPORTERS WILL RECEIVE ADVANCED FORWARD EXCHANGE NUMBERS
“We have good news for our exporters. Due to the fluctuation in the exchange rate, our export companies, which have difficulty in giving prices, will be given forward exchange rates directly through the Central Bank. The exchange rate difference that may arise at the end of this transaction will be paid to our exporting company in TL.”
3- GOVERNMENT CONTRIBUTION WILL INCREASED TO 30 PERCENT IN BES
“In order to increase the attractiveness of our private pension system, whose fund size has reached 250 billion liras, we are increasing the state contribution rate by 5 percent to 30 percent.”
4- ZERO WITHDRAWAL ON DOMESTIC DEBT DOCUMENTS
“We are reducing the withholding tax here to zero percent in order to increase the demand for government domestic debt securities.
5- ONE POINT DISCOUNT IN CORPORATE TAX FOR EXPORT AND INDUSTRY
We are planning a one-point reduction in corporate tax for export and industrial companies in order to support international competition and encourage investment by reducing the tax burden on corporate earnings.”
6- NEW REGULATION IN VAT
“We are reorganizing the Value Added Tax to ensure efficiency, fairness and simplification.”
7- Withholding Tax on Dividend Payments Will Decrease To 10 Percent
“The taxation on dividends and the declaration of this income have become a deterrent for investors. In order to eliminate this problem, we are reducing the withholding tax on dividend payments to be made by companies to 10 percent.”
8- PUBLIC DEBT WILL BE ISSUED
“Investors' orientation to Turkish Lira-based assets will be encouraged by issuing public debt securities indexed to income shares obtained from SEEs and transferred to the budget.”
9- GOLD UNDER THE PILLOW WILL BE BROUGHT TO THE ECONOMY
“It is known that there are 280 thousand tons of gold with a value of 5 billion dollars under the pillow in our country. New tools will be developed together with market stakeholders to include these golds in the financial system and bring them into the economy.”
10- PUBLIC BANK LOANS WILL BE USED IN PRIORITY SECTORS
“A structure will be established that will enable public banks to transparently extend a certain percentage of their total loans to priority sectors, which will be announced every year. With the support of the credit guarantee fund, long-term employment protection and development priority business loans will be given.
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