Turkey Seeks to Restructure Taxes Again to Boost Economy, BudgetBy and
Finance Minister Agbal says government sent plan to parliament
Taxpayers to get discount for settling unpaid bills upfront
Turkey’s government plans to restructure nearly $20 billion in unpaid taxes, the second such move in a year, as it seeks to boost revenue and stimulate growth.
A bill sent to parliament on Tuesday would allow taxpayers to repay existing debt to state institutions over a period of three years starting July, and receive discounts for paying upfront, Finance Minister Naci Agbal said in an interview with Bloomberg HT television in Ankara on Wednesday. The amount covered by the measure is at least 73 billion liras, Agbal said.
“We are helping citizens who are in difficulty, and at the same time creating new revenue for the budget,” Agbal said. “We are in a period where fiscal policy needs to support growth, which seems to be in a cyclical decline due to domestic and external factors.”
The measure would extend a tax amnesty announced after last year’s failed coup attempt that only covered government receivables through June 2016. The new bill lengthens the period to the end of March, and is the latest in a series of fiscal measures to spur growth that have pointed to the government easing a previously tight fiscal stance. Agbal said the measures were “temporary” to give the economy a necessary boost.
For more, read: Turkish Finance Minister Sees Budget Gap Pressure After Stimulus
The minister has maintained that a 30-percent ratio of sovereign debt to gross domestic product gives Turkey the freedom to overspend until growth is back on track. When Agbal announced a similar amnesty last year, taxpayers applied to restructure more than $20 billion in unpaid taxes and fines.
But budget data this week showed that revenue -- which Agbal said would increase as the economy grows -- isn’t catching up to rising spending. The government ran the biggest gap for the month of March since at least 2006, as revenue shrank by 3 percent from a year earlier. Value-added taxes collected domestically, a key gauge of consumption, fell by a third from 2016.
For more, read: Turkey Spending Before Referendum Sent March Deficit Soaring
The lira extended losses during Agbal’s speech and was trading 0.1 percent lower at 3.6642 per dollar at 12:47 p.m. in Istanbul.