Steel tax exemption will take effect in Turkey soon
Güncelleme Tarihi:
Reuters
Oluşturulma Tarihi: Şubat 25, 2009 00:00
ANKARA - An exemption on the payment of value-added tax on securities linked to steel and other commodities held in storage is expected to take effect soon in Turkey, a senior Finance Ministry told Reuters yesterday.
The London Metal Exchange, the world's premiere futures exchange for non-ferrous metals has long sought passage of the reform, which was within legislation ratified by Turkey's parliament last week and is now awaiting presidential approval.
The LME launched steel billet futures last February, defying the conservative steel industry which has shunned futures saying the involvement of financial players in the market could distort prices. But the turnovers have been growing slowly over the year, with interest from physical traders and stockists as well as mini-mills, who do not enjoy the pricing power of steel giants.
The VAT issue was an obstacle which prevented the full participation of Turkish mills in the market. The VAT reform was part of legislation passed last week which was designed to minimize the impact of the global financial crisis on Turkey, including both tax measures and steps to boost employment.
"This is not specially for the London Metal Exchange, but a regulation in the law prevents the imposition of VAT on the quotation of any security ... linked to goods while they are held in storage in Turkey," the source said. He said the Finance Ministry would decide to which goods in storage this would apply.
The LME launched steel billet futures last February, defying the conservative steel industry which has shunned futures saying the involvement of financial players in the market could distort prices. But the turnovers have been growing slowly over the year, with interest from physical traders and stockists as well as mini-mills, who do not enjoy the pricing power of steel giants.
The VAT issue was an obstacle which prevented the full participation of Turkish mills in the market. The VAT reform was part of legislation passed last week which was designed to minimize the impact of the global financial crisis on Turkey, including both tax measures and steps to boost employment.
"This is not specially for the London Metal Exchange, but a regulation in the law prevents the imposition of VAT on the quotation of any security ... linked to goods while they are held in storage in Turkey," the source said. He said the Finance Ministry would decide to which goods in storage this would apply.