AKP proposes new tax bill offering amnesties and incentives for capital owners

The Justice and Development Party (AKP) in Turkey has introduced a significant new legislative proposal aimed at stimulating the economy through a series of amnesties and incentives, particularly targeting capital owners and businesses. This 15-article package, presented to the Grand National Assembly, signals a proactive approach by the government to bolster economic activity and attract foreign and domestic capital back into the formal economy.

A key component of the proposal is the "asset amnesty" or "asset peace" provision, which allows individuals and entities to bring their undeclared assets—including cash, gold, foreign currency, and securities—held both domestically and abroad into the Turkish financial system by July 31, 2027. This measure is designed not only to increase liquidity within the country but also to bring previously untaxed assets into the purview of the tax authorities, albeit with preferential tax rates. The government's assurance that no tax investigations will be conducted on these repatriated assets provides a strong incentive for compliance.

Furthermore, the bill introduces substantial reductions in corporate tax rates. Manufacturers and exporters will see their tax burden decrease from the current rates to 9%, a significant 16-point advantage. Other sectors will benefit from a reduction to 14%. These measures are clearly intended to boost industrial production and export competitiveness, crucial elements for Turkey's economic growth strategy. Additionally, the proposal includes a 100% exemption on profits from transit trade for participants in the Istanbul Financial Center and income tax exemptions for non-residents on their foreign earnings for 20 years, further enhancing Turkey's attractiveness as a financial hub.

From a Turkish perspective, this legislative package represents a pragmatic effort to address economic challenges by leveraging existing capital and encouraging investment. While Western media might scrutinize such measures for potential impacts on transparency or fairness, the Turkish government and its supporters view them as necessary tools to stimulate growth, create jobs, and strengthen the national economy. The emphasis on bringing capital back into the system and providing tax relief to key economic actors reflects a domestic-centric economic policy aimed at maximizing national resources and enhancing competitiveness in a challenging global economic environment.

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We are opening the way for funds, gold, foreign currency assets located abroad to be brought into our economy by July 31, 2027, in order to increase voluntary tax compliance.