Government slashes VAT on furniture

Government slashes VAT on furniture

Government slashes VAT on furniture

Value added tax (VAT) on furniture has been slashed from 18 percent to 8 percent, Treasury and Finance Minister Berat Albayrak has announced.

“The furniture industry had demanded a reduction in VAT. Following a talk with representatives from the industry we started to work on this. Today, I would like to announce that we have cut VAT on furniture,” Albayrak said at a gathering with businesspeople in the western province of Çanakkale.

The Turkish Furniture Manufacturers’ Association (MOSDER) has welcomed the news.

“This provides a relief to the industry...We want VAT rate to be fixed at 8 percent throughout 2020,” Mustafa Balcı, the head of the association, said in a written statement, noting that tax cuts introduced in 2019 had been extended periodically.

The furniture sector is one of Turkey’s leading industries, supporting a number of side-industries and creating jobs, Balcı noted.

“With the announced VAT reduction, the furniture sector will be able to invest more in job creation.”

Balcı also said that the furniture industry exports products to 179 countries and that shipments to foreign markets rose 9 percent in 2019.

The furniture sector targets to boost its exports by 20 percent, and its export revenue target for 2023 is above $10 billion, he added.

[HH] Recovery underway

At the gathering in Çanakkale, Albayrak said that the Financial Stability and Development Committee convened on Dec. 31 to discuss the strategies and priorities for 2020.

“The recovery in the real sector continues. Leading indicators suggest that we will meet all our targets and even overshoot them in 2020,” he said, noting the “significant” increases in intermediate goods, equipment imports as well as the rise in exports.

The minister also underlined the improvement in confidence indices.

“The seasonally-adjusted headline economic confidence index advanced to 91.6 in the fourth quarter from 84.6 percent in the third quarter...The confidence indices for services, retail and construction are all on the rise,” he said.

Albayrak reiterated that the government forecasts 5 percent economic growth for the next three years.

“Leading indicators show that we can land on the growth plateau of 5 percent even before 2020, in the final quarter of 2019.”

The minister also said that the annual interest rates on credits extended to the agriculture sector will decline to a range of zero percent to 4.5 percent from 6 percent.

“With the decline in interest rates, production costs in the agriculture industry will come down,” Albayrak noted.