{"id":528336,"date":"2010-04-15T05:17:00","date_gmt":"2010-04-15T09:17:00","guid":{"rendered":"tag:blogger.com,1999:blog-13049624.post-3924633970711692596"},"modified":"2010-04-15T05:18:39","modified_gmt":"2010-04-15T09:18:39","slug":"turkey-proud-to-keep-current-tax-rates","status":"publish","type":"post","link":"https:\/\/mereja.media\/index\/528336","title":{"rendered":"Turkey proud to keep current tax rates"},"content":{"rendered":"<p>By Delphine Strauss in Istanbul, FT, Published: April 14 2010<\/p>\n<p>Turkey can afford to keep tax rates unchanged \u201cfor the foreseeable future\u201d while other European governments struggle to repair the damage done by the financial crisis, Ali Babacan, economy minister, said on Wednesday.<\/p>\n<p>His comments reflect Turkey\u2019s pride in weathering last year\u2019s turmoil without bailing out any banks or seeking help from the International Monetary Fund. In contrast with much of the European Union it aspires to join, Turkey won recent upgrades to ratings of its sovereign debt after setting medium term fiscal targets it is likely to beat in 2010.<\/p>\n<p>\u201cWe see no reason to raise corporate tax for years to come. We don\u2019t need to raise VAT . . . We don\u2019t have the problems some countries [have] on debt and deficits,\u201d Mr Babacan said. He was critical of the EU\u2019s failure to enforce fiscal rules, saying rescue plans for Greece were \u201cextinguishing the fire\u201d and \u201cnot a strategic solution\u201d.<\/p>\n<p>Stable tax rates may not be enough to draw foreign companies to Turkey, as Mr Babacan hopes. Christian Keller, economist at Barclays Capital, said labour taxes, which foreign employers often pay more punctiliously than locals, remained high. Tim Ash, at the Royal Bank of Scotland, said Turkey needed to broaden the tax base and improve collection.<\/p>\n<p>But analysts agree Turkey\u2019s public debt, around 45 per cent of GDP at the end of 2009, compares well with that of Greece, its historical rival, and with European averages. The treasury has had little trouble rolling over debt and lengthening its maturity. \u201cEurozone membership doesn\u2019t mean much any more . . . people look much more at countries\u2019 individual fiscal strength,\u201d Mr Keller said.<\/p>\n<p>Tax revenues will receive a further boost if economic growth outstrips the official 2010 forecast of 3.5 per cent, as most expect it will. But some fear any gains will be offset by a spending spree before elections in 2011.<\/p>\n<p>\u201cWe have to be more careful on the expenditure side,\u201d Mr Babacan said, but he added the main reason Turkey had rejected IMF funding was that it wanted greater freedom to spend or save any extra revenues.<\/p>\n<p>Separately, Turkey\u2019s central bank on Wednesday sought to calm investors\u2019 worries over rising inflationary pressures, by outlining an \u201cexit strategy\u201d under which it will gradually reduce its role in supporting liquidity in money markets. However, it gave no time scale for technical measures such as raising requirements for foreign exchange reserves to pre-crisis levels.<\/p>\n<p>The announcement followed Tuesday\u2019s decision to hold interest rates at a historic low, with policymakers saying they were unlikely to change \u201cfor some time\u201d. Tevfik Aksoy, Morgan Stanley economist, said on Wednesday\u2019s measures were a \u201cfirst step\u201d to remove excess liquidity, signal higher rates ahead and show an intention to act \u201cas and when necessary\u201d.<\/p>\n<div class=\"blogger-post-footer\"><img width='1' height='1' src='https:\/\/blogger.googleusercontent.com\/tracker\/13049624-3924633970711692596?l=energynewsletterturkey.blogspot.com' alt='' \/><\/div>\n","protected":false},"excerpt":{"rendered":"<p>By Delphine Strauss in Istanbul, FT, Published: April 14 2010 Turkey can afford to keep tax rates unchanged \u201cfor the foreseeable future\u201d while other European governments struggle to repair the damage done by the financial crisis, Ali Babacan, economy minister, said on Wednesday. His comments reflect Turkey\u2019s pride in weathering last year\u2019s turmoil without bailing [&hellip;]<\/p>\n","protected":false},"author":4032,"featured_media":0,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[7],"tags":[],"class_list":["post-528336","post","type-post","status-publish","format-standard","hentry","category-news"],"_links":{"self":[{"href":"https:\/\/mereja.media\/index\/wp-json\/wp\/v2\/posts\/528336","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/mereja.media\/index\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/mereja.media\/index\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/mereja.media\/index\/wp-json\/wp\/v2\/users\/4032"}],"replies":[{"embeddable":true,"href":"https:\/\/mereja.media\/index\/wp-json\/wp\/v2\/comments?post=528336"}],"version-history":[{"count":0,"href":"https:\/\/mereja.media\/index\/wp-json\/wp\/v2\/posts\/528336\/revisions"}],"wp:attachment":[{"href":"https:\/\/mereja.media\/index\/wp-json\/wp\/v2\/media?parent=528336"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/mereja.media\/index\/wp-json\/wp\/v2\/categories?post=528336"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/mereja.media\/index\/wp-json\/wp\/v2\/tags?post=528336"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}