Industry players hungry for more tax reductions
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Anatolia News Agency
Oluşturulma Tarihi: Mayıs 13, 2009 00:00
ANKARA - Those who were exempt from the tax cuts implemented by the government seek redress from the Finance Ministry. But they are not alone. Sector representatives, who have already benefited from the tax cuts, which were implemented as part of the government’s stimulus measures, have also been pushing for an extension to the tax cuts currently in effect
The Finance Ministry has been overwhelmed by applications from various industries, including textile, cement, iron and steel, demanding tax reductions.
Those who have not been able to benefit from the reductions of private consumption tax, ÖTV, and value added tax, or VAT, have mobilized to request similar advantages from the government. The tax reductions were part of the government’s fourth package of measures aimed at curbing the impacts of the global economic crisis. Some of these requests were sent in via the Union of Chambers and Commodity Exchanges of Turkey, or TOBB.
Almost all industries requested tax cuts, including producers and maritime industry, said the Finance Ministry. Even those who have benefited from earlier cuts applied to the ministry requesting further tax reduction. Among those is the tourism industry. Although VAT implemented on tourism industry was cut from 18 percent to 8 percent as of Jan.1, 2009, industry players are still pushing the issue, demanding further cuts.
Tourism is among the industries that have been hit worse by the crisis, an industry leader said, adding that establishments are in trouble and there is a request for VAT to be cut to 1 percent from 8 percent for three months. However, the ministry’s response to the sector was harsh and absolute. "We have reduced your taxes as much as possible. Further cuts are not planned," the ministry said.
Representatives of the maritime industry have also requested both ÖTV and VAT cuts, stating new tax legislation was required in order to revive and develop maritime tourism, according to an industry source. VAT reduction for machinery and equipments as well as forestry products was requested. Dairy producers also applied to the ministry for the reduction of the VAT implemented on the industry to be reduced to 1 percent.
Never enough
Tax reductions implemented on some industries were limited to three months. As the period provided nears its expiration date, the players of these industries have also applied to the ministry to request an extension. Furniture producers lead that group and are requesting an extension for the period provided for the tax cuts for another three months. In a similar move representatives of construction and real estate industries have also requested an extension for VAT discounts implemented on real estate sales and title deed registration fees.
Under regular circumstanced the lower tax period expires at the end of June. Others who request extensions for tax cuts include white goods and information technology producers. An extension till the end of 2009 is a must, a source said. Auto industry’s ÖTV discount will also expire on June 15. Industry representatives demand a junkyard reduction. They said the industry may overcome the crisis by selling scrap at a lower price.
"During the talks we have held on the economic stimulus package, we had first considered junkyard discount. However, then we have decided on ÖTV cuts. During that period 80 percent of the cars sold were imported, which means the discount has helped the foreign auto factories more then the local ones," according to an official at the Finance Ministry, speaking to Anatolia News Agency on condition of anonymity.
"It was obvious that the auto industry lied about their excessive inventories. Because following the ÖTV cuts, [the demand got so high], local factories kept customers waiting for one to two months until the cars arrived. Under these conditions it has become clear that there is no need for another tax cut in this industry."
Those who have not been able to benefit from the reductions of private consumption tax, ÖTV, and value added tax, or VAT, have mobilized to request similar advantages from the government. The tax reductions were part of the government’s fourth package of measures aimed at curbing the impacts of the global economic crisis. Some of these requests were sent in via the Union of Chambers and Commodity Exchanges of Turkey, or TOBB.
Almost all industries requested tax cuts, including producers and maritime industry, said the Finance Ministry. Even those who have benefited from earlier cuts applied to the ministry requesting further tax reduction. Among those is the tourism industry. Although VAT implemented on tourism industry was cut from 18 percent to 8 percent as of Jan.1, 2009, industry players are still pushing the issue, demanding further cuts.
Tourism is among the industries that have been hit worse by the crisis, an industry leader said, adding that establishments are in trouble and there is a request for VAT to be cut to 1 percent from 8 percent for three months. However, the ministry’s response to the sector was harsh and absolute. "We have reduced your taxes as much as possible. Further cuts are not planned," the ministry said.
Representatives of the maritime industry have also requested both ÖTV and VAT cuts, stating new tax legislation was required in order to revive and develop maritime tourism, according to an industry source. VAT reduction for machinery and equipments as well as forestry products was requested. Dairy producers also applied to the ministry for the reduction of the VAT implemented on the industry to be reduced to 1 percent.
Never enough
Tax reductions implemented on some industries were limited to three months. As the period provided nears its expiration date, the players of these industries have also applied to the ministry to request an extension. Furniture producers lead that group and are requesting an extension for the period provided for the tax cuts for another three months. In a similar move representatives of construction and real estate industries have also requested an extension for VAT discounts implemented on real estate sales and title deed registration fees.
Under regular circumstanced the lower tax period expires at the end of June. Others who request extensions for tax cuts include white goods and information technology producers. An extension till the end of 2009 is a must, a source said. Auto industry’s ÖTV discount will also expire on June 15. Industry representatives demand a junkyard reduction. They said the industry may overcome the crisis by selling scrap at a lower price.
"During the talks we have held on the economic stimulus package, we had first considered junkyard discount. However, then we have decided on ÖTV cuts. During that period 80 percent of the cars sold were imported, which means the discount has helped the foreign auto factories more then the local ones," according to an official at the Finance Ministry, speaking to Anatolia News Agency on condition of anonymity.
"It was obvious that the auto industry lied about their excessive inventories. Because following the ÖTV cuts, [the demand got so high], local factories kept customers waiting for one to two months until the cars arrived. Under these conditions it has become clear that there is no need for another tax cut in this industry."