Mehmet Şimşek clarifies 'misunderstood' remarks: We will go after those who do not pay

Treasury and Finance Minister Mehmet Şimşek made important statements at the "Gaziantep's Stars Award Ceremony" organized by the Gaziantep Chamber of Industry (GSO) at the Şehitkamil Culture and Congress Center.

Stating that the world is going through a period where global growth is slowing and there are significant global challenges, Şimşek said, "Unfortunately, in recent years, the rule-based global system has begun to crack. In fact, at its core, the essence of the matter is the competition between a hegemonic power and a rising power. Everything else is a detail. That is, the geostrategic competition between the US and China. This, of course, causes the system created after the Second World War to crack. Currently, there is no new system, and the old system is troubled, which brings very serious problems with it."

Pointing out that the recent decline in commodity prices and the expectation of improvement in global financial conditions are viewed positively, Şimşek stated that price stability is a prerequisite for permanent prosperity growth through sustainable high growth.

"WITH TAX REFORMS, WE WILL GO AFTER THOSE WHO DO NOT PAY"

Stating that gross reserves have increased by 42 billion dollars since May due to the falling current account deficit and increasing capital inflows, Şimşek continued as follows:

"As a ministry, we need to rationalize public expenditures. It is not easy to reduce expenditures. If we can direct them to productive areas, then we will be relieved. I said 'we will broaden the tax base' recently, and we were misunderstood. Our concern is those who do not pay taxes and are in the informal economy. It is about bringing them into the system. In other words, broadening the tax base means fighting against informality. This is something that exists in the literature; I am not inventing it. With tax reforms, we will go after those who do not pay. We need to improve tax justice. Look, we do not collect taxes from minimum wage earners; it is zero tax. We are giving up significant income from all wages up to the minimum wage. We need to consolidate these even further."

"THE GOAL IS TO REDUCE INFLATION TO SINGLE DIGITS"

Reminding that reducing inflation is at the center of their program, Şimşek noted the following:

"Because the main goal of this program is to reduce inflation to single digits. Unfortunately, this is not easy; there is no shortcut. We will reduce inflation to single digits in accordance with world norms and in a rule-based manner. To do this, the normalization process in monetary policy, selective credit tightening, and especially directing resources and loans to exports and production instead of consumption are among our goals. Now you might say, 'You are doing these things, but inflation is rising.' Because monetary policy works with a lag. Furthermore, the starting point was not favorable for the program. Our advice is to focus on monthly inflation. Because on an annual basis, inflation will enter a rapid downward trend starting from the second half of next year. The program also expresses that. This is what we have been saying from the beginning. Because inflation, even if with a lag, will respond to the right policies; that is, inflation cannot resist the force of gravity. Inflation will come down in this country. Because we set out with the right policies."

SUPPORT FOR 281 PRODUCTS

Reporting that they support the real sector for production and export-oriented sustainable growth, Minister Şimşek said:

"We have priorities in the economy. If there is investment, there is employment, there is production. We want investment to turn into employment and exports. We are doing what is necessary for this, and we will continue to do so. We also care about the Investment Commitment Advance Loan. We told our Ministry of Industry and Technology, 'You tell us which products need to be produced.' They said, 'We want 281 products to be produced as a priority,' and we said, 'Okay.' In this sense, by attaching importance to technical competence, we will not provide a loan for something that the Ministry of Industry and Technology does not approve. That is, our Ministry of Industry and Technology will provide technical competence. Then, the assigned private and public banks will conduct financial feasibility, and finally, the Central Bank will provide the loan. Later, to strengthen the fight against inflation, we will perhaps apply for this resource for the last time. High technology will reduce Turkey's foreign trade deficit. We will prioritize only 281 products with the Investment Commitment Advance Loan."

Stating that applications will begin on December 20, Şimşek said, "Please examine the relevant website of our Ministry of Industry and Technology. If you can say 'I can produce' one of those products, or 'I can find a partner, I can find technology, I can produce,' we will provide you with 300 billion liras in resources. This will have a 10-year maturity; we are trying to do what banks cannot do. The interest rate will also depend on the project and its nature, but it will be one-third of market interest rates. I really recommend it. Please take responsibility; we will help you, we will support you. Make investments, and let us support you. We will also support projects over 1 billion liras. We are providing very strong incentives, and we will continue to do so. We are providing very strong support, and the Treasury covers this. Because we are on the side of production and the exporter."

News Source: AA