Mehmet Şimşek makes statement on tax amnesty and inflation

Treasury and Finance Minister Mehmet Şimşek drew attention to the increasing uncertainties in the global economy during a television program he attended. Stating that financial conditions are tightening and growth expectations carry downside risks, Şimşek said, "While financial conditions are tightening on one hand, the fact that growth forecasts carry downside risks also reduces risk appetite. If this shock continues, it could even include the risk of global stagflation or recession."

CLEAR RESPONSE TO TAX AMNESTY EXPECTATIONS

Speaking on expectations for a tax amnesty or restructuring, Şimşek emphasized that no such step would be taken. Stating that current policies will be maintained, Şimşek expressed that a regulation in the nature of an amnesty in the tax system is not on the agenda.

EVALUATION REGARDING THE TURKISH ECONOMY

Stating that global developments are not unique to Turkey, Şimşek said, "Actually, what is being priced in is not a matter specific to Turkey; the outlook on Turkey's macroeconomic fundamentals is quite positive. Therefore, there is a high probability that risk appetite will return. The fact that the duration of the war is relatively limited, meaning under 45 days, is valuable. We considered the war lasting one month as our main scenario."

ENERGY PRICES AND THE IMPACT OF THE SLIDING SCALE SYSTEM

Touching upon the measures taken regarding energy prices, Şimşek stated that the system implemented limits price increases. Şimşek said, "During the crisis period, Turkey performed better than developing countries; this is a reflection of this proactive approach. If we had not implemented the sliding scale system, the price of diesel would have been 103 lira per liter, and gasoline would have been 78 lira per liter."

RESERVES AND MARKET OUTLOOK

Providing information regarding Turkey's reserve position, Şimşek stated that the reserves are strong. "As of yesterday, we have a reserve of approximately 162 billion dollars; we are better off in terms of reserve adequacy than in the past. Our reserves are strong, and we are also in the positive in net terms excluding swaps," said Şimşek, adding that measures have been taken against short-term capital movements.

EXPORTS AND EXCHANGE RATE BALANCE

Stating that the real exchange rate does not create a negative picture for industrialists and exporters, Şimşek expressed that the impact of external demand on exports is more decisive than the exchange rate.

LIMITED DETERIORATION IN INFLATION EXPECTATIONS

Evaluating the inflation outlook, Şimşek stated that there has been a partial deterioration in expectations recently. Şimşek said, "We are currently seeing some deterioration in year-end inflation expectations compared to a few months ago." Emphasizing that they remain committed to program targets, Şimşek stated that the process will be managed.

TAX REDUCTION ON THE AGENDA

Announcing that work is underway on tax regulations for manufacturing exporters, Şimşek stated that new steps in this area are on the agenda. Şimşek expressed that production and exports will be prioritized and that tax advantages will be expanded.

TAXATION POLICY TO CONTINUE

Giving a message regarding tax policies, Şimşek said, "We will continue to collect taxes from everyone in proportion to what they earn. We will continue our regulations and efforts to collect more from those who earn more. We will continue to collect taxes from those who make money from money. Therefore, withholding tax is not on our agenda right now. If there is a search for a restructuring in the nature of a tax amnesty; there will absolutely not be an amnesty, it is very clear, very explicit."

News Source: 12punto