Finance Minister Mehmet Simsek joined Financial Times for a live Q&A session on Twitter.
Simsek, made the following remarks through his official twitter account.
Turkey’s fundamentals are strong w/ solid fiscal position, low public debt ratios, sound banking sector & low household debt.
Financial conditions are tight, we’ve introduced macroprudential measures to prevent excessive credit growth.
Yes, a relatively large current account deficit is a source of vulnerability, but it’s likely to narrow significantly this year.
Finally, Turkey’s gross external debt at 47% of GDP is moderate and well below the eastern European average of 70%
The fallout from politically motivated corruption probes has been limited w/ some market volatility & slowdown in economy Q1-14.
However, March 30th elections has provided clarity on political outlook, restoring investor confidence & triggering recovery.
We've successfully combatted corruption over the past decade. Please check the corruption perception index by Transparency Int'l.
Parliament has approved AK Party's motion to set up an investigation commission to examine the claims against 4 former ministers.
Until recently, there was limited interaction b/w industry & universities. However, we’re changing this via incentives for R&D
Turkey’s R&D spending as a % of GDP doubled to nearly 1% over the past decade. We plan to triple it by 2023.
Investors get up to 225% tax break. As a result, patent applications have risen by nearly 6 folds to more than 12,000 in 2013.
We’ve recently introduced strong incentives (50% tax break) for commercialization of patents. These steps shld yield results.
Now it is time to answer Qs on Tax issue
No sports club, including GS, will get financial amnesty. They pay millions of $s in transfer fees. They must also pay taxes
At 27.7% of GDP, tax burden (incl. social sec. premiums) in Turkey is not high, lower than OECD avg of %34.5.
Indirect taxes account for 45% of all tax revenues incl. social sec. premiums in Turkey. This is higher than OECD avg of 33%.
However, this is due to a relatively low level of direct taxes at 13.6% of GDP in Turkey, compared to 20.8% in the OECD.
Finally, Indirect tax revenues amount to 12.5% of GDP in Turkey, lower than 13.4% in EU avg but higher than 11.1% of OECD avg.
Turkey isn't focused only on Muslim nations for trade. Europe is our largest trade partner, accounting 4 over 40%
Education is priority #1. We’re spending nearly a quarter of tax revenues on education. FATIH project will help improve quality
Quality of education is improving as visible in PISA results. Turkey is narrowing gap b/w OECD countries
We’ve ambitious targets: to overtake Italy in fashion, France in tourism & Germany in manufacturing
Turkish economy is well-diversified. We aim to move up the value chain in all sectors that we’ve competitive advantage
To achieve this, we’ve introduced a new investment incentive scheme, providing strong incentives for strategic industries.
Turkey is world’s 6th largest tourism destination & will become the next center for medical services exports.