Türkiye announces progressive reforms in line with Mid-Term Economic Plan
New regulations will be enacted shortly in line to review tax expenditures and eliminate ineffective exemptions, tax breaks and reductions not reflected in consumers
The Minister of Treasury and Finance, Mehmet Simsek, revealed additional austerity measures that will be gradually implemented alongside the goals outlined in the Medium-Term Program (MTP).
Accordingly, new administrative and legal regulations will be enacted in four areas: public procurement reform, governance reform in state economic enterprises (SEEs), tax justice and combatting the informal economy.
VAT reduction not reflected to consumers to be reversed
All exemptions and tax breaks in the Türkish Tax Legislation have been reviewed to determine their effectiveness and advantages. In line with the goal of the Medium-Term Program to review tax expenditures and eliminate ineffective exemptions, tax breaks, and discounts, new regulations will be enacted shortly.
The government had reduced VAT to 1% in food and many other sectors. This issue will be thoroughly resolved with the second savings package.
New measures against the informal economy
In line with the goals of combating the informal economy, the Tax Audit Board, MASAK (Financial Crimes Investigation Board) and the Revenue Administration will intensify their audits.
Within this framework, the number of personnel responsible for audits within the Ministry of Treasury and Finance has been increased. Over a thousand inspectors have been assigned to field duty. Audits related to taxation, including fraudulent VAT practices, inflated prices and POS device inspections, will be increased and sustained throughout Türkiye.
Additionally, legal regulations will ensure that transactions at the land registry are based on the actual sale price. The Ministry of Labor and Social Security will also take a more active role in combating informal employment and conducting more frequent inspections.
State economic enterprises (SEEs) reform
New steps will also be taken to ensure the efficient and effective operation of SEEs. Under the ‘SEE Governance Reform’ title, the top management and board memberships of SEEs will be restructured.
Public enterprises and boards will be more accountable using performance-based measurement methods. Mechanisms will be established to ensure coordination among public enterprises interacting in sectoral, administrative and financial areas.
Legal and administrative changes regulating these areas will be made.
Changes to procurement law
Furthermore, the Public Procurement Law will be updated to comply with international norms and standards. Exceptions excluded under 25 different headings from the Procurement Law will be reduced.
Direct procurement methods will be restricted, except for force majeure and special procurement of certain goods and services. Public procurement expenditures will be savings-focused, and every step will be taken to prevent damages arising from it.
Source: Newsroom
