Turkish bill prepping corporate tax cut presented to parliament

The ruling AK Party of Turkish President Tayyip Erdogan has presented to parliament a draft law giving him the authority to lower corporate tax by up to five percentage points and to extend pandemic-related employment support.

ANKARA, Oct 19 (Reuters) - The ruling AK Party of Turkish President Tayyip Erdogan has presented to parliament a draft law giving him the authority to lower corporate tax by up to five percentage points and to extend pandemic-related employment support.

The bill also includes new wealth amnesty measures enabling assets to be brought into the country from abroad without facing taxation.

Four sources with knowledge of the matter told Reuters last week that Turkey is working on a regulation to further lower corporate tax from the previously set level of 20% for next year.

The corporate levy was the third biggest source of tax revenue for the government in the first nine months of this year, with 78.6 billion lira ($9.90 billion) collected, according to Finance Ministry data.

Under the draft law, presented to parliament on Oct. 16, measures such as insurance premium support and stamp duty support for employers can be extended until the end of 2023 and a short labour pay benefit can be extended until June 30, 2021.

Measures restructuring tax and social security premium debts were expected to be added to the bill during its passage through parliament, according to AK Party lawmaker Mehmet Mus.

Under a legislative change in 2017, corporate tax was raised to 22% from 20% for the years 2018-2020. Without the latest measure, the tax was set to fall back to 20% from next year.

However, the new bill will enable Erdogan to reduce the tax by up to five percentage points from 20%.

The planned wealth amnesty would allow people to bring into the country until mid-2021 money, gold, foreign exchange, securities and other capital market instruments without paying tax on them.

Erdogan will be able to extend this measure by up to 1 year, under the draft law.

Also presented to parliament was the 2021 draft budget which contains the targets set out last month in the country's new economic programme.

Separately, parliament has passed a law doubling the Treasury's borrowing limit for 2020 from an initially set limit of 140 billion lira ($18 billion) in the light of measures taken to support the economy in the face of the coronavirus pandemic.

($1 = 7.9187 liras)

(Reporting by Nevzat Devranoglu; Writing by Daren Butler; Editing by Jonathan Spicer)

((daren.butler@tr.com; +90-212-350 7053; Reuters Messaging: daren.butler.thomsonreuters.com@reuters.net))

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