Posted by meb at March 25th, 2009

Turkish Prime Minister Tayyip Erdogan announced Wednesday new economic measures including value added tax (VAT) cuts for the sale of businesses and in the furniture sector for three months in a bid to revive the country’s slowing economy.

The government will reduce value-added tax in the furniture sector, for the sale of businesses, and on some industrial machines used by Small and Medium Sized Enterprises (SMEs) to 8 percent from the previous 18 percent, Erdogan said at an election rally campaign meeting in Turkey’s central province of Cankiri.

The VAT also included in information technologies sector will also be lowered to 8 percent, Erdogan said, adding that land registry fee will be cut to 0.005 percent from 0.015 percent.

Erdogan said the government might take new measures. “So far we have put into force 53 measures and we will implement new measures if necessary,” he said.
Turkish Finance Minister Kemal Unakitan had earlier said that the previous tax cuts launched to boost the economy would be included in the new stimulus package.

In the latest package launched in mid-March Turkish government had reduced tax rates in the automotive, white goods and housing sectors for three months to give impetus to the sluggish economy.

Unakitan however rejected claims suggesting an extension of the recent private consumption tax cuts implemented for 3-months in the automotive, real estate and white goods sectors.

“The private consumption tax cuts being implemented in some sectors were launched for three months. Suggestions that these would be extended are incorrect,” said Unakitan, adding that such statements cause unease in the markets and among producers.

Tax cuts and investment incentives were implemented by government to enliven the textile sector and create employment in less developed regions in a package launched in the second half of 2008.

The International Monetary Fund (IMF) expects Turkey’s once booming economy to shrink 1.5 percent in 2009. The government, who until recently retained an official 4 percent growth target, said the growth target would be revised.
source: Hurriyet daily news

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