New economic package to increase dynamism, contribute to Turkey's economic growth

The debt restructuring and social reforms package announced by Prime Minister Binali Yıldırım late Monday is expected to provide a stimulus to the Turkish economy and contribute to its economic growth, according to the Turkish business world.In a speech after a Cabinet meeting late Monday, Yıldırım said the new measures would cost the government between TL 22 billion to TL 24 billion ($5.4 billion to $5.9 billion). He said the measures being taken in the package would earn the government more than it spends.

The package would provide citizens with new opportunities to pay debts, fines and social security premiums to public institutions, the prime minister said. Accordingly, 90 percent of the interest owed due to debt will be written off in single payments.

With the package, the three-year income tax exemption for entrepreneurs between 18 to 29 years of age was also extended with the state taking over social security payments for a year.

An amnesty has been introduced for former university students who have been expelled or have discontinued their education so they can re-register and study, Yıldırım said, adding that some 500,000 youngsters could benefit from the amnesty, which does not cover students discharged due to terror charges.

A bonus payment of TL 1,000 for 12 million retirees will also be given on both Qurban Bayram, also known as Eid al-Adha, and Ramadan Bayram (Eid al-Fitr), Yıldırım said.

He said that the monthly old-age pension given to persons 65 or older has been increased from TL 266 to TL 500, and some 600,000 currently benefit from these payments.Yıldırım also announced a zoning reform that would affect some 13 million unregistered buildings throughout Turkey.

The per-kilogram price of tea, an important crop in northeastern Turkey, has been set at TL 2.45, Yıldırım added.

Commenting on the new package, Istanbul Chamber of Commerce (İTO) Chairman Şekib Avdagiç said the debt restructuring and social reform package announced by Yıldırım will increase the dynamism in the economy.

He pointed out that the debt and premium restructuring and the amnesty are very important steps for the economy. Underlining that the debt restructuring and social reform package announced by the prime minister will boost the economy, Avdagiç suggested the productive stimulus of this amnesty will be felt by every citizen individually."The citizen who has paid the accumulated tax and premium debt to the public, and the retiree whose income has been raised with the bonus will be able to plan for the future with much more confidence," Avdagiç continued, noting that the entrepreneur who has installed the previous debts will be able to turn a new page for the next taxes and premiums.

"New investment plans will also be started unhindered because they will not face legal procedures. The state will also be able to accelerate its investments by gaining income that it cannot collect," he added.

With regard to Yıldırım's economic package, Ankara Chamber of Commerce (ATO) Chairman Gürsel Baran said the restructuring of the debts of a wide range of segments, including merchants, tradesmen, workers and students, will contribute to economic growth as well as provide relief to the sectors.

In a written statement, Baran said the new support package including taxes and premiums will pave the way for Turkey.