MÜSİAD President Mahmut Asmalı shared his assessments regarding the economic developments on the agenda. In his statement, President Asmalı said, "The steps taken towards achieving fiscal discipline should be regarded as an opportunity for carrying out the reforms to be made in the tax structure."
The assessment of President Asmalı is as follows:
"It is evident that the public budget is under significant financing pressure because of the transfer and investment expenditures made following the economic fluctuations, the pandemic and the natural disasters experienced in recent years. Indeed, in addition to the negative developments experienced on a global scale, the increase in budget expenditures has accelerated with the effect of the election process as well.
In particular, the cost to our country of the earthquakes that occurred on 6 February 2023 and were named the "Disaster of the Century", and the heavy bill of reconstruction, are known by the whole of society. According to official figures, the total cost to the economy of these earthquakes, which affected 11 of our provinces, is USD 104 billion.
It is extremely important that the cities be rebuilt rapidly so that social and economic life in the region returns to normal. In this context, our state aims to build a total of 650 thousand houses, 319 thousand of them within the first year.
In the light of all these developments, it is inevitable that the costs incurred be shared fairly by all segments of society within social solidarity. However, the most critical actor of the process will be the public sector, since the earthquake will bring a serious additional burden on public finance.
In this context, the National Solidarity Package has been put into practice by the Ministry of Treasury and Finance and a very serious step has been taken towards achieving budget discipline.
Of course, we consider it entirely natural that moves towards additional tax revenues should come so that the economic cost of the earthquake can be met in a sustainable manner by public resources, and as MÜSİAD we would like to emphasize once again that we will also continue hereafter the solidarity we have maintained together with our members from the moment of the earthquake until today.
At the same time, while a change is being made in tax policy, it is also of vital importance to implement a tax policy that prioritizes and adopts tax justice by taking into account two issues that closely concern social life, namely inflation and income distribution. Considering that the effect of indirect taxes such as VAT and SCT will be greater particularly on the lower income group, preserving the scope of the exemption for basic food and basic necessity goods is of great importance in terms of income distribution and in social terms.
At this point, the increases in indirect taxes levied on expenditures, which will affect cost inflation on the producer side, must be implemented gradually and in parallel with governance principles by the relevant parties, and before the regulations are put into effect, their possible impacts on production, employment, inflation and especially on exports in the context of international competitiveness must be analysed in detail.
In addition, there is a need for structural reforms such as the elimination of the imbalances between direct and indirect tax burdens to be implemented rapidly and decisively. In this context, these steps taken towards achieving fiscal discipline should be regarded as an opportunity for carrying out the reforms to be made in the tax structure, and the announcement of action plans on this matter should be accelerated.
Considering the need for direct tax revenues, it will be extremely valuable for our state to develop its capacity in this sense and to display an approach that will not affect tax payment behaviour and will not put the citizen who pays his taxes at a disadvantage while new tax amnesties and the existing exemptions and exceptions are applied.
As representatives of the business world, we believe that predictability in monetary and fiscal policies comes at the top of the most important factors for an increase in investment and employment. For this reason, it is important that policy documents such as a revised Medium Term Program or a Macro Stability Plan, through which all economic actors can transparently see the medium and long term planning regarding the economy, be shared with the public.
Finally, managing public expenditures effectively is highly critical. The Circular on "Austerity Measures" in the public sector, published in the Official Gazette on 30 June 2021, must be meticulously followed and implemented. In this scope, the Circular sent by the Ministry of Treasury and Finance to public institutions on 17 July 2023 regarding the rationalization of state expenditures has been gratifying. For, saving on public expenditures that lead to waste and inefficiency and directing these resources to necessary and productive areas of spending will provide benefit not only for budget discipline but also in terms of economic development.
With more than 13,000 members, MÜSİAD has been working with the same enthusiasm for 33 years for the social and economic development of the country, with a total of 169 contact points, 84 within the country and 85 points in 71 different countries abroad.
On this occasion, as MÜSİAD, we reiterate our confidence in and support for the new economic administration, and we express that our belief is complete that, following the re-establishment of macroeconomic stability, Türkiye will be able to advance towards its long term targets with more confident steps and in a sustainable manner."