New giant wealth fund will be monitored: Minister

ANKARA

A new sovereign wealth fund formed by Turkish authorities will be audited and adhere to international standards, Finance Minister Naci Ağbal has said in response to criticisms that the new fund will be devoid of any oversight.

The fund will be audited in three stages, Ağbal said.

“There will be an independent audit. Three audit officials, who will be appointed by the prime minister, will also be on duty, in addition to an audit mechanism by the parliament. Annual audit reports and another audit report prepared for the prime minister will be sent to parliament every year. The Planning and Budget Commission will audit all companies in the fund on an annual basis,” Ağbal said in a televised interview with CNN Türk's Hakan Çelik on Feb. 7. 

There will also be no change in the management and operational activities of Turkish companies whose stakes have been transferred to the fund, the minister added.

“The wealth fund will not be able to decide on the management of these assets on its own. We have just transferred the stakes of these companies from the privatization authority to the Turkish Wealth Fund,” Ağbal said.

“The fund will be run in line with international standards. Every company has its own management board…The fund will never interfere with the strategies of these companies,” he added. 

Turkey has transferred stakes worth billions of dollars in Ziraat Bank, Halkbank, the Borsa Istanbul stock exchange, Turkish Airlines and state-owned pipeline operator BOTAŞ, among others, to the new sovereign wealth fund, in a bid to help finance giant infrastructure projects. 

Ağbal said Turkey would become a key player in international projects thanks to a constructive synergy which has been unleashed with the addition of the companies to the new fund. 

“New [financial] sources will be created thanks to the fund companies. A significant source flow will be produced in financing big infrastructure projects … We also aim to prevent fluctuations in the money markets,” he said, adding that the fund would be strengthened in the near future through new decisions and international partnerships. 

Ağbal said Halkbank and Turkish Airlines had been in the privatization portfolio. 

“The privatization processes of these assets will again be decided by the government,” he added. 

Tax cuts for regular taxpayers 

The minister also said 5 percent of tax cuts would be offered to taxpayers who pay their taxes on a regular basis and on time. 

Ağbal also said the economy was expected to receive a boost thanks to recent tax revisions in the construction and home appliances sectors.  

The government has cut special consumption taxes on a number of electronic home appliances and has extended value-added tax (VAT) cuts on property acquisitions.

Special consumption taxes on air conditioners, refrigerators, washing machines, dish washers, vacuum cleaners and some small home appliances have been reduced from 6.7 percent to zero for acquisitions until April 30, according to a cabinet decision that was published in the Official Gazette on Feb. 3.

The cabinet also extended cuts in the VAT for property acquisitions until September.