Bloomberg Agency said that the Turkish government intends to increase taxes on banks and companies as part of efforts to offset some of the burdens resulting from the large budget deficit.
Bloomberg referred to a bill presented by the ruling Justice and Development Party, which proposes to increase the corporate tax rate by 25 percent, instead of the current 20 percent. The law also includes increasing the tax on banks, insurance companies, financial brokerage and pensions, as well as electronic payment companies, from 25 percent to 30 percent.
The bill would also allow the government to nearly triple the volume of net borrowing for this year, referring to the difference between government borrowing and debt service in terms of local and foreign currencies.
The government can now increase or decrease the borrowing ceiling by 5 percent.
Turkish President Recep Tayyip Erdogan boosted spending before the country’s elections last May, as salaries increased, and an early retirement system was offered to millions of workers.
The elections came in the wake of two devastating earthquakes that occurred on the sixth of last February, and caused economic losses of about 100 billion euros, according to the Turkish Ministry of Finance.
Source: Bloomberg