Govt extends supports for severely-hit sectors with tax reductions

TURKEY will continue to support sectors hit most severely by COVID-19 related restrictions in several ways, the country’s Treasury and Finance Minister said Friday.

Lütfi Elvan stated that they have accordingly extended the period of the Value Added Tax (VAT) rate reductions applied for the last year in sectors including accommodation, food and beverage, transportation, workplace rental and other services for another two months to support the sectors negatively affected by the pandemic.

The Minister made the related statement via his Twitter account.

Elvan also announced that the withholding tax rate reductions on Turkish lira deposits have been extended until the end of September.

“We are extending the withholding tax rate reductions on Turkish lira deposits until the end of September. Thus, we will continue to increase the attractiveness of Turkish lira deposits and support reverse dollarization,” he wrote.

In December, President Recep Tayyip Erdoğan announced grant and rental support for businesses and promised to continue discounts for value-added taxes.

The withholding rate, which was reduced to 10% from 20% by the end of 2020, was extended to June. The VAT, which was reduced from 18% to 8%, in business renting services remained at 8% until the end of the first half of this year. Other VAT reductions introduced in several sectors were also in effect until June. As part of the relief package announced in spring last year, the government provided financial support to cushion the economic fallout from the outbreak. It had slashed taxes for hardhit sectors and unlocked funding for workers.