Treasury and Finance Minister Nabati announced that tax and stock examinations were initiated in multiple sectors with the allegation of "speculative price formation", again pointing to the end of the year for the decrease in inflation.
Nureddin Nebati, Minister of Treasury and Finance, answered the questions of Dünya newspaper. Nebati announced that the savings in Currency Protected Deposit accounts reached 539 billion liras, and the number of legal person customers was 27 thousand.
Explaining that tax inspections have been initiated in more than one sector with the allegation of 'speculative price formation', Nabati also said, “The measures show our determination in the fight against inflation. We expect the discounts to be reflected in the prices.”
RUSSIA UKRAINE CRISIS
The answers to Nabati's questions were as follows:
* While the effect of the epidemic on the economy began to decrease, now the Ukraine crisis has emerged. How will this situation affect the Turkish economy and the program being implemented?
It is obvious that the situation that has recently emerged between our important trade partners, Russia and Ukraine, may cause a series of economic negativities on a global scale, in addition to its devastating humanitarian and social consequences. It is expected that the price increases experienced especially in energy and agricultural commodities will put additional pressure on the already high global inflationary environment and cause volatility in financial markets. However, a decrease in the global risk appetite and a further slowdown in international capital movements are expected. Along with these global risks, our country may also be affected in foreign trade, tourism, energy and food sectors due to the size of our economic relations with Russia and Ukraine.
As a matter of fact, as of 2021, the share of these two countries in our exports is 3,9 percent, while their share in our imports is 12,4 percent. When evaluated in terms of tourism, it is seen that the number of visitors coming to our country from Russia and Ukraine is approximately 7 million. On the other hand, oil and natural gas prices, which reached their highest levels in the post-pandemic period, are considered to have negative effects on both inflation and the current account balance. In addition, it is thought that Turkish contracting companies, which have a significant weight in these countries, may be adversely affected by the process.
'DEVELOPMENTS ARE FOLLOWED CLOSELY'
Finally, since the two countries are our important trade partners in agricultural products, developments that may affect the agricultural sector are also closely followed. Of course, the effects of these risks on our country and other countries' economies may vary depending on the duration and size of the war. As the economy management, we closely follow all these developments and their possible effects together with our stakeholder institutions, and we consider and evaluate the economic dimensions of these developments in all their fields.
E.g; Together with our ministries and institutions in the Price Stability Committee, we also evaluated the effects of this crisis. Accordingly, in order to ensure food supply security and avoid problems in accessing food products, our Ministry of Agriculture and Forestry has implemented its facilitating decision regarding the importation of agricultural products from Ukraine.
As you know, the Turkish Economy Model quickly and significantly eliminated the volatility in the financial markets with the financial instruments it put into practice and increased confidence in the economy.
ensured the continuity of the environment.
With the Turkish Economy Model, we aim to reach our value-added growth target, which provides high employment, by focusing on investment, production and exports. In this framework, we will resolutely continue our efforts towards the goal of balanced and stable growth in the upcoming period as well. We will continue to take all kinds of measures to reduce the possible negative effects of the Ukraine-Russia crisis on this economic model.
'DELAYED EFFECT OF EXCHANGE RATE IS EXPECTED'
*Inflation has exceeded 50 percent in consumer prices and 100 percent in producer prices, how do you think inflation will follow from now on? Is it possible to narrow the gap between producer and consumer inflation?
Fighting inflation is one of our top priorities. We are implementing our short-term, medium and long-term policy steps in this area. First of all, we achieved significant gains by implementing a series of instruments to prevent exchange rate fluctuations that adversely affect price stability. Recently, we reduced the VAT rate on food products from 8 percent to 1 percent, and on electricity from 18 percent to 8 percent. These measures demonstrate our determination in the fight against inflation. On the other hand, we continue our work on the structural elements of inflation together with our relevant institutions within the Price Stability Committee.
As you know, increases in energy and other commodity prices all over the world in the post-pandemic period, and disruptions in supply chains have led to an increase in inflation at the global level. These supply-side effects were also felt in our country. Inflation is expected to remain high throughout 2022 due to cost pressures, the lagged effect of the exchange rate, and the effects of global energy prices. At the end of the year, we expect inflation to decline with determined steps. When we provide a decrease in inflation, the gap between CPI and PPI will narrow. In the upcoming period, the disciplined fiscal policy will be continued at the point of decreasing inflation; and a participatory approach will be maintained with our stakeholders in all our policies.
'WE FOLLOW THE REFLECTION OF DISCOUNTS ON PRICES CLOSELY'
*Do you anticipate implementing a special program other than the currently implemented one, especially for reducing inflation caused by food and energy prices?
In our country, we see that the pressures caused by food and energy prices have an impact on inflation. In order to support agricultural production in order to control the increase in food prices, we increased agricultural subsidies from TL 25,6 billion to TL 29 billion. In addition, we have recently reduced the prices of fertilizers. In order to ensure the sustainability of food and raw material supply security, especially cereals and oilseeds, we will take steps to implement the necessary measures in favor of our citizens at all commercial stages, from the production stage to domestic sales and foreign trade. We continue to work on the project called 'From Unity to Blessing' and we will implement it in the near future. With this project, we will provide consumers with access to certain essential products at reasonable prices. In addition, we will closely monitor the reflection of the steps we have taken, especially taxation, on prices. No one should have any doubt that we will fight the unfair price that does not match the market realities. In this context, companies are closely monitored by the Inflation Fighting Team formed by our Ministry, and the strictest legal measures are taken regarding price movements that do not comply with the market balance.
'RISKY LIABILITIES ARE DETECTED IN STOCKIST SECTORS'
*Do you have a mechanism for measuring the results of increased inspections regarding price increases?
E-archive invoice, e-dispatch and similar electronic document data in the database of the Ministry, purchase and sale statements made by taxpayers or created by the Revenue Administration using electronic documents, analysis studies on taxpayers' financial statements and notices and complaints submitted to our ministry are sensitively. is being evaluated. Following these studies carried out in the analysis units of our Ministry, field inspections and actual inventory studies are carried out on the basis of sectors where price increases or stocking are observed.
Speculative price volatility or stocking is determined, especially in basic food, cleaning products, automotive, furniture, alcoholic and non-alcoholic beverages, cement, shoes, cosmetics, construction materials, paper, plastic, stationery, fertilizer, grain storage and warehousing (licensed warehousing). Risky taxpayers are identified through field inspections such as actual inventory, polling, and asking for explanations. Field inspections are continuing intensively, and in order to prevent unfair price increases and stockpiling, we will continue to be on the field with determination in the coming periods. As a result of the evaluation of these studies, current year tax examinations are also carried out by taxpayers who are determined to be risky in terms of taxation.
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