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27 October 2019
ECONOMY

Turkey plans to boost coffers with tax changes and debt issuance

The draft bill, submitted to parliament, would increase the top income tax rate to 40 per cent from 35 per cent for individuals with an annual income of over TRL 500,000 ($87,000) as well as introduce several new levies.

TURKISH LIRA/BLOOMBERG


Turkey is looking at bolstering its coffers with a slew of tax amendments and a higher borrowing limit, to help cover the budget deficit as the Treasury braces for a year with a heavy debt repayment schedule, reportedBloomberg.

Additionally, another proposal is to lift the Treasury’s net borrowing limit by TRL 70 billion in 2019, after already raising it by five per cent twice to TRL 89.2 billion.

The draft also authorises President Recep Tayyip Erdogan to double the levy on interest received from foreign-currency deposits and increases taxation on top league soccer players to 20 per cent from 15 per cent. The government also proposed slapping an additional charge on properties valued at more than TRL 5 million.

Turkey’s budget is under strain after an economic downturn that hit tax revenue and a spending spree during back-to-back elections. The fiscal gap stood at TRL 85.8 billion through September 2019, a 51 per cent increase compared to the same period in 2018.

Looming debt repayments next year further threatens to squeeze public finances. In the first quarter alone, the Treasury plans to redeem about TRL 75 billion of local-currency debt, a record figure for the period in data going back to 2005.


RELATED STORIES: PRESIDENT RECEP TAYYIP ERDOGAN TAX AMENDMENTS LIRA

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