07.06.2024 23:10
Treasury and Finance Minister Mehmet Şimşek announced that the period for the corporate tax exemption provided to companies regarding the Currency Protected Deposit (CPD) will not be extended, stating "We will not renew the tax advantage for companies in July." Minister Şimşek also stated that the economic program is working "like clockwork" and said, "If we continue on our path with patience and determination, inflation will rapidly decrease to single digits by 2026."
The Minister of Treasury and Finance, Mehmet Şimşek, spoke about the Currency Protected Deposit (KKM) and said, "We have now put an end to KKM in Turkish lira. Let me also inform you in advance that we will not renew the tax advantage for companies in foreign currency in July."
"WE HAVE PUT AN END TO KKM IN TURKISH LIRA"
Minister Şimşek stated in his speech at the "Climate Economy Sustainable Financing Summit" that climate change is no longer a subject of debate and it is a reality that is progressing much faster than previously predicted, regardless of which indicator is considered. He also mentioned the KKM, which has been discussed since its implementation and is being completely phased out by the government:
"Exiting KKM was an important priority for us, but we said from the beginning that we would exit without disrupting the market, without causing problems in the market. And we are indeed exiting. We have now put an end to KKM in Turkish lira. Let me also inform you in advance that we will not renew the tax advantage for companies in foreign currency in July. Plus, we have already imposed a limited tax on deposit interest income. Therefore, we are working on this issue as well. Therefore, we believe that normal Turkish lira deposits will become more attractive."
"IMPROVEMENT IN INFLATION EXPECTATIONS"
There is an improvement in inflation expectations. Inflation has been high on an annual basis. It peaked in May. But if you ask the market, they say inflation will decrease to 33% in the next 12 months. They also say it will decrease to 21% in the next 24 months. We believe that these figures will converge towards our targets in the coming months."
"REDUCING INFLATION IS A CHALLENGING PROCESS"
Şimşek stated that the banking sector had a difficult year during the inflation process and continued:
"There is a temporary squeeze in your book value. But we are reducing the risk so quickly that do you remember your multiple, the ratio of your market value to book value? It was around 0.3 last year at this time. Now it is approaching 1. It will almost double or triple. Why am I saying this? For patience. We are not only asking for patience from a certain segment of society. We are asking for patience from all segments of society. Why? Because reducing inflation is a challenging and difficult process. But there is a great opportunity window ahead of us. If we continue on our path with patience and determination, inflation will decrease to single digits by 2026. We believe in this."
"THE PROGRAM IS WORKING LIKE CLOCKWORK"
Şimşek emphasized that the economic program is working and said, "The program is working like clockwork. Healthy policies, rational policies, policies based on world norms and rules, appropriate policies, and structural reforms have created a new story for Turkey. There is tremendous interest in this story. Both domestically and internationally. Investor confidence has increased. This is truly reflected in the numbers. In the last two months, the Central Bank's reserve position has exceeded 70 billion dollars."
RESPONSE TO CRITICISM: THEY ONLY LOOK AT THE HALF EMPTY GLASS
Şimşek also addressed the criticism of the implemented program and said:
"When we said 'this program will work and trust will be restored,' they said it was not possible. First, they said 'there is no program.' Then they said 'there is a program, but it is not a credible program.' Now, of course, after the local elections, the increase in interest, certain circles called it 'carry trade.' The ratio of these short-term, so-called hot inflows, to total inflows is not even one-third. So, there is a real portfolio preference here. Of course, critical perspectives are very valuable to us, constructive criticisms are very valuable. Because they are our guide. But certain circles always prefer to look at the half empty glass when it comes to this program."