VP Cevdet Yılmaz rules out new taxes

The government does not plan to introduce new taxes, Vice President Cevdet Yılmaz has said, adding that the additional budget does not foresee new taxes to meet the financing need of the projected expenditures.

The government recently submitted an additional budget draft worth 1.12 trillion Turkish Liras to parliament and the parliament's budget and planning commission approved the draft earlier this week.

Responding to lawmakers' questions at the commission regarding the additional budget, Yılmaz reminded that the government introduced some tax regulations with an omnibus bill. "Other than those, there will not be new taxes."

The government earlier this month increased the value-added tax (VAT) by 2 percentage points.

The VAT, which was hiked from 18 percent to 20 percent, applies to a wide range of goods, including white goods, furniture and electronic goods. The VAT on other goods, such as detergents, soap, toilet paper and diapers, was increased from 8 percent to 10 percent.

The additional budget allocates 80.5 billion liras for interest expenditure and around 101 billion liras for goods and services expenditure. Some 484 billion liras and 67.4 billion liras were allocated for capital transfers and capital expenditure.

Yılmaz acknowledged that the FX-protected deposit account (KKM) scheme has some costs. "But it also has benefits. It has helped stabilize the foreign exchange rates. The average maturity of deposits in the banking system also increased thanks to the KKM. Since the exchange rates have stabilized, it also helps with the public's foreign debt service."

He added that the government does not plan to end the KKM scheme any time soon but said that "it would not go forever."