Treasury and Finance Minister speaks on BloombergHT: Tax to equities will come but with the next tax package,

Treasury and Finance Minister Mehmet Şimşek made evaluations on the main issues of the economy in Bloomberg HT-Habertürk broadcast. Minister of Treasury and Finance Mehmet Şimşek made important statements on key economic issues during a joint broadcast on Bloomberg HT and Habertürk. These statements provide important insights into the government's economic goals and strategies.  Here are the highlights: Exiting the Gray List - Turkey's exit from the gray list was the result of a team effort. - The support of the Ministry of Interior and the Ministry of Justice was crucial for exiting the gray list. - Exiting the gray list is a significant achievement for the healthy and reputable functioning of our financial system. - A letter was written to FATF to prevent political considerations from coming into play. - Combating the financing of terrorism has been made a priority, and Turkey was unanimously removed from the gray list in this regard. - MASAK's (Turkey's watchdog for black money) capacity will be increased, and artificial intelligence will be implemented. Financial Situation and Reserves - There has been a strong inflow of funds in recent months. - Foreign exchange reserves have approached IMF criteria, with net reserves excluding swaps rising to $12 billion. - The Turkish Lira has appreciated somewhat in real terms. The goal is to ensure stability in nominal exchange rates by permanently reducing inflation. Current Account Deficit - Rational policies and structural reforms are increasing investor confidence. - The current account deficit fell from $57 billion in May 2023 to around $26 billion in May 2024. - The current account deficit will be permanently reduced with active state industrial policies. EYT (a form of retirement scheme) and Budget Deficit - The annual cost of EYT was 724 billion TL. - The budget deficit will be controlled and reduced to below 3% of GDP next year. - There has been a continuous decline in currency denominated deposit accounts (KKM), and the tax advantage for companies has been removed. Inflation and Employment - The main source of inflation is growth driven by domestic demand. - Real wage increases will be ensured with the reduction of inflation. - The minimum wage that was hiked by 49% in January will be showing a real increase as CI inflation (currently at 75,5%) is expected to fall below 42% by the end of the year. - The minimum wage in Turkey is among the highest in developing countries. - Inflation is expected to decrease, with the first drop in June and significant drops in July, August, and September. Tax Policies - The focus will be on broadening the tax base, not introducing new tax burdens. - A 15% minimum corporate tax will be introduced for multinational companies. - Tax exemptions for REITs will be removed, and a 30% tax will be applied to build-operate-transfer companies. - Crypto assets will be included in the tax scope. - Taxation of capital gains in the current package requires further work. We believed that a transaction tax on the stock market would have undesirable consequences. The stock market is not part of this package but will be the subject of the next package. - Artificial intelligence will be used in tax audits, and penalties for tax evasion will be increased. - Work on tax packages is ongoing and not yet completed.