Furniture industry kindled by tax cuts
Güncelleme Tarihi:
Anatolia News Agency
Oluşturulma Tarihi: Mayıs 30, 2009 00:00
BURSA - Turkey’s furniture industry is collecting the fruits of a government-imposed value added tax reduction. The implementation has boosted demand and increased sales. Price advantages are fueling the country’s export figures, according to a sector representative
A value-added tax reduction introduced for Turkish furniture sales is pleasing to both producers and consumers, according to the chief of a sector association.
The 10 percent tax reduction has been passed on directly to consumers, and is creating positive reactions in every part of the sector, said Nazif Türkoğlu, chairman of the Association of Turkish Furniture Manufacturers.
The value-added tax, or VAT, reduction affects positively not only the furniture sector but also the country’s economy, Türkoğlu said, adding that some furniture stores reflect the reduction at a higher rate.
Informing on the demand-boosting impacts of the reduction, he said, "The VAT reduction has taken place in a period marked with an increase in weddings and home renewals has boosted consumer demand and positively affected the sector. The reduction introduced in spring, known as the wedding and moving season, has created a great synergy."
Furniture sales increased 25 percent in the first half of April, compared to the corresponding period of 2008, he said. "Following the VAT reduction, prices have dropped as much as 20 percent, affecting the purchasing power of consumers significantly."
"In another development, the stocks that stood at 1.5 billion Turkish Liras as of March have declined by around 25 percent in the first two weeks of April."
Türkoğlu also expressed his expectation to see the activity to continue increasingly till the end of June.
Furniture exports, which stood at $1.03 billion in 2007, rose to $1.33 billion in 2008. Over the period, domestic market volume climbed from $7 billion to $7.5 billion.
"Figures have revealed that the furniture sector has kept up growth both at home and abroad. This year, we expect the sector to maintain its existing volume through the efforts to develop exports as well as with revival in the construction sector. We aim to witness exports reaching $2.5 billion by 2010."
The furniture sector’s domestic market volume totaled $6 billion in 2006, $7 billion in 2007 and $7.5 billion in 2008, he said. "As its export figures surpass import figures, it is among the rare sectors that do not add to the current account deficit burden for the country’s economy. We are also pleased with export figures increasing each year."
Turkey’s furniture industry focuses on quality and offers a wide range of products, Türkoğlu said. Furniture of Turkish origin is much more qualified compared to those produced in Asian countries, and as qualified as European furniture, he said, adding that Turkish products are also offered at a moderate price. All these advantages fuel the sector’s exports, he said.
The sector is likely to reach a better status with the increase of the activities related to design and research and development, according to Türkoğlu.
Furniture exports are predicted to reach $2.5 billion by 2010, he said, expressing his expectation to see Turkey to climb from the current 21st spot to the 15th in the world furniture export ranking by 2010.
The 10 percent tax reduction has been passed on directly to consumers, and is creating positive reactions in every part of the sector, said Nazif Türkoğlu, chairman of the Association of Turkish Furniture Manufacturers.
The value-added tax, or VAT, reduction affects positively not only the furniture sector but also the country’s economy, Türkoğlu said, adding that some furniture stores reflect the reduction at a higher rate.
Informing on the demand-boosting impacts of the reduction, he said, "The VAT reduction has taken place in a period marked with an increase in weddings and home renewals has boosted consumer demand and positively affected the sector. The reduction introduced in spring, known as the wedding and moving season, has created a great synergy."
Furniture sales increased 25 percent in the first half of April, compared to the corresponding period of 2008, he said. "Following the VAT reduction, prices have dropped as much as 20 percent, affecting the purchasing power of consumers significantly."
"In another development, the stocks that stood at 1.5 billion Turkish Liras as of March have declined by around 25 percent in the first two weeks of April."
Türkoğlu also expressed his expectation to see the activity to continue increasingly till the end of June.
Furniture exports, which stood at $1.03 billion in 2007, rose to $1.33 billion in 2008. Over the period, domestic market volume climbed from $7 billion to $7.5 billion.
"Figures have revealed that the furniture sector has kept up growth both at home and abroad. This year, we expect the sector to maintain its existing volume through the efforts to develop exports as well as with revival in the construction sector. We aim to witness exports reaching $2.5 billion by 2010."
The furniture sector’s domestic market volume totaled $6 billion in 2006, $7 billion in 2007 and $7.5 billion in 2008, he said. "As its export figures surpass import figures, it is among the rare sectors that do not add to the current account deficit burden for the country’s economy. We are also pleased with export figures increasing each year."
Turkey’s furniture industry focuses on quality and offers a wide range of products, Türkoğlu said. Furniture of Turkish origin is much more qualified compared to those produced in Asian countries, and as qualified as European furniture, he said, adding that Turkish products are also offered at a moderate price. All these advantages fuel the sector’s exports, he said.
The sector is likely to reach a better status with the increase of the activities related to design and research and development, according to Türkoğlu.
Furniture exports are predicted to reach $2.5 billion by 2010, he said, expressing his expectation to see Turkey to climb from the current 21st spot to the 15th in the world furniture export ranking by 2010.