Ball in firms’ court: Turkish economy minister
ISTANBUL - Hürriyet Daily News
Economy Minister Zafer Çağlayan reveals the details of the government’s new incentives at a meeting in Istanbul. The minister says support for investments in Turkey’s poorest regions may even reach 100 percent.Economy Minister Zafer Çağlayan said April 6 that now was the time for businesses to take advantage of growing support for more investment, as he introduced the details of a new comprehensive incentive scheme.
Investments will be supported to varying degrees based on four categories: region, scale of investment, strategic investment and general incentive applications, Çağlayan said. According to the scheme, provinces fall under six categories in terms social and economic development.
“Let’s say an investment project of 5 million liras and with 40 employees receives a regional incentive. The amount of the support will amount to 1.3 million liras if the investment is made in the first region, 1.7 million liras in the second region, 2.6 million liras in the third region, 3 million in the fourth region and 3.7 million in the fifth region. If the investment is made in the sixth region, the support exceeds the nominal investment cost reaching 5.2 million liras,” he said.
The government was applying positive discrimination to the sixth region, he said, also adding that the social security contribution of businesses investing in the region would be paid by the government for 10 years. The sixth region generally comprises of the poorest provinces in east and southeast Turkey.
While the minister said that one of needs of the country was to manage a transition from labor intensive technology to information intensive technology, the government was aiming to attract labor intensive industries to the sixth region.
Industrialists have welcomed the government’s new incentive system. The Turkish Industry and Business Association (TÜSİAD) said the new incentive scheme was “a quite positive step in terms of supporting economies of scales.”
“The new system brings a strategic approach to eliminate structural problems that prevent the Turkish economy from entering a sustainable growth path,” the mouthpiece of the largest Turkish businesses said.
“The new incentive package will lift our country to the Super League (of developed countries),” said Ekrem Demirtaş, the head of İzmir Chamber of Commerce, adding that it was in line with Turkey’s high economic targets. “Althouh İzmir does not have [attractive] regional incentives [in the scheme], there is a great deal of support to technological and strategic investments,” he said.