ITO proposes regional minimum wage

Istanbul Chamber of Commerce (ITO) President Şekib Avdagiç, in his statement, reminded that the minimum wage to be applied in 2024 will be determined by the end of this month, and said that the minimum wage is evaluated by the business world as a study that affects the entire wage scale, rather than just being a minimum wage.

Emphasizing that an "ambitious" Medium-Term Program (MTP) announced for 2024 is in effect, Avdagiç said, "Accordingly, there is a roadmap targeted regarding inflation, exchange rates, and interest rates. Within all of this, we must proceed in a balance where the business world does not lose its competitiveness. It must be a structure where not only wages are balanced, but also interest rates and exchange rates are in balance, so that it increases the competitiveness of producers and exporters in Turkey and prevents domestic producers from becoming disadvantaged against imported products. We believe it would be correct for the new minimum wage to be determined by seeing this big picture." he said.

"UPDATING INCOME TAX BRACKETS IS A TOPIC THE BUSINESS WORLD EMPHASIZES"

Şekib Avdagiç stated that along with the minimum wage, a topic the business world emphasizes is the need to update income tax brackets.

Sharing the information that approximately 15 years ago, the first tax bracket of the minimum wage was around 13 times the minimum wage, Avdagiç said, "Although the minimum wage increases faster every year as a social wage, income tax brackets have increased at a much lower rate. While the first tax bracket was 13 times the minimum wage in 2008, at the point we have reached today, with the expected minimum wage hike and the tax update based on the revaluation rate, it will fall to a value of less than 6 times in 2024." he said.

Avdagiç stated that in addition to rearranging employees' income tax brackets, revising the upper limit for Social Security Institution (SGK) premiums could also be an important development for working life.

"MINIMUM WAGE CAN BE EVALUATED AND DETERMINED REGIONALLY"

ITO President Avdagiç emphasized that just as there are regions where different incentives from 1 to 6 are applied for investments, the minimum wage could be determined in 3 or 4 scales, even if not 6, and commented, "The minimum wage can be evaluated and determined regionally. We believe that the minimum wage in Istanbul should not be the same as the minimum wage in provinces under the 6th region incentive scope. Therefore, determining the minimum wage with a slightly higher scale in developed provinces and a relatively lower scale in developing provinces will provide a benefit."

Referring to the fact that the international credit rating agency Moody's did not make an assessment regarding Turkey's credit rating on December 15, Avdagiç stated that the current MTP is also considered very close to reality by many market actors.

Avdagiç said, "If we examine it since 2018, we see that international rating agencies and institutions like the World Bank and OECD have always started their data regarding Turkey's growth and Turkey from a lower point. Turkey has always grown above what was predicted." he said.

Evaluating the investments coming to Turkey, Avdagiç said that the policy pursued since the election is a consistent process that foreign fund owners find reasonable and positive.

Avdagiç said, "Of course, for us, the high cost of financing is currently important. The most critical issue is to pull down inflation as quickly as possible and, accordingly, to lower the cost of financing and ensure that the investment desire of actors in the business world in Turkey is increased."