Şimşek's statement on inflation decline and taxes! Will VAT and Income Tax increase?

Treasury and Finance Minister Mehmet Şimşek spoke to Kanal 7, a television station known for its proximity to the government.

Making statements regarding the economy, Şimşek noted that they faced a very large deficit due to the February 6 earthquakes, stating, "Instead of borrowing from abroad, we moved to reduce the deficit. Because of this, we went for tax increases. These are directly inflationary. These will not happen in 2024. These are also one-time effects. There will be no new inflationary taxes," he said.

"WE WILL NOT INCREASE INCOME TAX"

Arguing that they have drawn a clear framework in the Medium-Term Program (OVP), Şimşek said, "We will not increase the general VAT rate; 20 percent is the upper limit. We will not increase the corporate tax. We will not increase the income tax. We are very clear on this matter. However, we will review exemptions and exceptions. We will look at the efficiency status of these," he stated.

CIRCULAR TO INSTITUTIONS TO 'CUT SPENDING'

Minister Şimşek also announced, "We are not allowing any ministry to hire personnel other than those replacing retirees. We have sent a circular to all institutions. We will significantly cut and control expenditures in the public sector. I am clear on this issue."

"INFLATION WILL FALL STARTING JULY 3"

Providing a date for the decline in inflation, Şimşek spoke as follows:

"Inflation will start to fall from July 3. Because the output gap turns negative in July. There is a base effect. Monetary policy works with a lag.

From the beginning, we have been saying that inflation will start to fall from the second half of the year. A downward trend in inflation has begun. There is a program, and we will implement it with patience and determination."