Türkiye Unveils Steep Tax Cuts to Boost Competitiveness, Investment

Türkiye unveiled details on Monday of a broad package of incentives aimed to boost competitiveness and attract investment, and also position its biggest city Istanbul as a leading financial gateway across the region. At a press conference, Finance Minister Mehmet Simsek said Türkiye was extending a tax exemption on services exports to 100% to target high-value sectors like software, gaming, medical tourism. At the same time, it is reducing manufacturing exporters’ corporate tax rate ‌to 9% to ‌boost competitiveness and attract foreign direction investment (FDI), he ‌said. The ⁠tax reductions are ⁠long-term and “here to stay,” he told reporters, days after President Recep Tayyip Erdogan first floated the comprehensive legislative package including the tax plans. The package aims to bolster an economy that officials hope is emerging from a years-long inflationary crisis that cut deeply into individuals’ and companies’ savings and earnings, prompting many Turks to seek stability ⁠abroad. Inflation was above 30% last month. Some of the incentives, including zero corporate income tax on transit trade, are focused on the companies located ‌in the Istanbul Financial Center (IFC), a new state-backed clutch of glassy towers on the city’s Asian side. The ⁠rate is ⁠95% for those located outside the IFC, Simsek said, noting it was set at 50% in years past. The package aims to “export more goods and services, attract more talent, entrepreneurs, capital, a new home that’s more encouraging local citizens to use Türkiye as a center of their activities and … placing IFC as one of the key regional hubs,” he said.