YASED: Corporate tax increase undermines our competitiveness
Engin Aksoy, President of the International Investors Association (YASED), evaluated Turkey’s potential to attract investment for the coming period.
Commenting on international direct investments (FDI) at the press conference held by YASED, Aksoy said:
“We have seen that the global FDI figure for 2022 has decreased by 12 percent, reflecting the global adverse events, to 1.3 trillion dollars. When we look at the composition, we see that real estate sales make up 50 percent of the total FDI inflows.This figure and composition do not reflect the ambition and potential of our country.
Emphasizing that Turkey has a real potential with its location, market size, infrastructure, young population and human resources, Aksoy said, “Our member companies plan to include an investment of 7.1 billion dollars in their programs in the coming period, if reassuring developments regarding the investment environment are realized. ” he said.
“Economic policy should not be reduced to monetary policy only”
YASED President Aksoy, in his evaluation of the gradual simplification and macroprudential measures announced by the Central Bank of the Republic of Turkey (CBRT) on 3 July, stated that the economic policy is a whole in terms of money, finance, incomes and sectoral policies.
Noting that all of the aforementioned elements should be carried out in harmony and support each other, Aksoy continued his words as follows:
“Therefore, we think that economic policy should not be reduced to monetary policy only. Turkey preferred to make some changes in its monetary policy in order to provide suitable financing conditions that would increase production. However, this choice of change led to the need for changes in many regulations. These regulatory changes were very frequent and very complex. and reduced the predictability of monetary policy.These changes can cause serious inefficiencies in financial markets and force firms to access finance.
We understand that the recent tax increases have resulted in the budget needed in the difficult period we are going through. We find it beneficial to carry out such broad and important regulations in longer terms in consultation with the relevant NGOs and private sector in order to ensure the predictability and transparency of the investment environment, and by conducting the necessary impact analysis.”
“The transition to a more competitive corporate tax application contributes”
Emphasizing that the provision of a predictable regulatory framework will play a major role in positively changing the risk perception towards Turkey, Aksoy said that raising the corporate tax rate from 20 percent to 25 percent undermines Turkey’s competitiveness, considering the global competitive environment, and that the corporate tax rates in the world. He underlined that they think it is an application contrary to the downward trend.
Aksoy said, “The abolition of these taxes, which were brought upon urgent need, in 2024, the transition to a more competitive corporate tax application and the provision of information on this will contribute to predictability and competitiveness.” made a statement.
