Turkiye To Raise Corporate Income Tax Rates, But Provides Export Incentives
Move comes to assist with required US$100 billion needed after earthquake devastations
Turkiye will raise corporate taxes to fund the recovery from major earthquakes that struck the country in February, according to a draft law presented to parliament by President Tayyip Erdogan’s ruling AK Party. The earthquakes in southern Turkey killed more than 50,000 people and left millions homeless. Business groups, economists and the government have said rebuilding could cost Turkey more than US$100 billion.
Amongst a number of proposed tax rises, the draft law raises corporate income tax from 20 to 25 per cent, while corporate income tax applicable for banks and financial institutions will rise to 30 per cent from the current 25 per cent rate.
However, it’s not all bad news. In order to encourage foreign trade, the bill proposes a 5 percent corporate tax discount for companies’ export income, nullifying the proposed hike for Turkiye’s exporters.
The bill also would also transfer the treasury-run part of the forex-protected Turkish Lira deposit accounts scheme to the Central bank. Under the scheme, the government and the Central bank will compensate Turkish Lira depositors for losses due to the depreciation of the currency.
The government paid Lira 92.54 billion (US$3.6 billion) from the budget to depositors with Lira savings under the scheme last year.
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