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Turkey has unveiled details of a broad package of incentives aimed to boost competitiveness and attract investment, and \u200calso position its biggest city Istanbul as a leading financial gateway across the region.<\/p>\n
At a press conference Monday, Finance Minister Mehmet Simsek said Turkey was extending a tax exemption on services exports to 100% to target high-value sectors like software, gaming, medical tourism.<\/p>\n
At the same time, it is reducing manufacturing exporters\u2019 corporate tax rate to 9% to boost competitiveness and attract foreign \u2060direction investment (FDI), he said.<\/p>\n
The tax reductions are long-term and \u201chere to stay,\u201d he told reporters, days after President Tayyip Erdogan first floated the comprehensive legislative package including the tax plans.<\/p>\n
The package aims to bolster an economy that officials hope is emerging from a years-long inflationary crisis that cut deeply into individuals\u2019 and companies\u2019 savings and earnings, prompting many Turks to seek stability abroad. Inflation was above 30% last month.<\/p>\n
Ankara introduced it at a time that the US-Israeli war with Iran rattled Gulf states, prompting some companies and banks there to consider other options. Asked about this, Simsek said \u200cthe package \u2060was not meant to take advantage of war fallout and was in the works long before.<\/p>\n
Some of the incentives, including zero corporate income tax on transit trade, are focused on the companies located in the Istanbul Financial Center (IFC), a new state-backed clutch of glassy towers on the city\u2019s Asian side.<\/p>\n
The rate is \u206095% for those located outside the IFC, Simsek said, noting it was set at 50% in years past.<\/p>\n
The package aims to \u201cexport more goods and services, attract more talent, entrepreneurs, capital, a new home that\u2019s more encouraging \u2060local citizens to use Turkey as a center of their activities and \u2026 placing IFC as one of the key regional hubs,\u201d he said.<\/p>\n
This month, the IFC\u2019s chief executive Ahmet Ihsan Erdem \u2060told Reuters that the Iran war prompted dozens of companies with operations in the Gulf to consider moving business there.<\/p>\n
The exporter incentives include what Simsek called a \u201cradical step\u201d toward reducing the corporate tax rate. [Reuters]<\/p>\n<\/p><\/div>\n