SHAFAQNA TURKEY. In order to create new resources in the economy, SCT has been added to new tax increases from the public in recent days.
Evaluating regulation after the decision was published, business representatives rated the effect of SCT with the words “Producer costs are reflected as a premium to the consumer” and warned of the danger of recession, inflation and growth in the informal economy. . Emphasizing that the competitiveness of the exporter in international markets will decline in the face of rising costs, representatives of the real sector said: “Stagnation is already observed in the European market.
Rising prices make it harder to compete. As our costs rise, orders are moving to Asia.” The real sector, which has faced many events such as recession risk, earthquake, minimum wage and EYT hikes in the first half of the year, commented that “the rest of 2023 will not be easy.” The business world is waiting for regulations that will henceforth provide the industry with a lifeline.
The Ministry of Finance justified the increase in excise duty for two reasons
Meanwhile, the Ministry of Treasury and Finance issued a written statement and explained the reasons for the increase in SCT.
In a statement from the ministry: “First of all, the increase is aimed at reducing, to some extent, the impact of additional expenses caused by the earthquake on the budget. Regulation will also indirectly support current account deficit control, as these products are imported. Second, despite the rise in global oil prices and the exchange rates of these fixed taxes, there has been little to no increase in taxes since 2016.
Because SCT amounts are fixed, they have melted away with inflation. As a result of this, SKT taken from fuel products; While its share of GDP was 4.58 percent in 2016, it dropped to 2.80 percent in 2022, and its share of tax revenue, which was 26.23 percent in 2016, dropped to 17.84 percent in 2022.
While the tax rate on sales price, including VAT, was over 50 percent for gasoline, diesel and LPG, the most consumed of these products, it has remained at 38.5 despite a recent increase.
ESO President Celalettin Kesikbash: “Despite the need to further strengthen our employment model, production and export-based economy, we fear losing competitiveness in our industry. Our industrialists do not want to lose their client portfolios and distribution channels that they have built over the years.
Access to finance is becoming more difficult every day due to the measures being taken. Industrialists, aware of the plight of public finances, see more inclusive, structural solutions that will save our economy from brittleness in the medium to long term, rather than classic recipes and easy-to-take measures, are more appropriate.
GSO President Adnan Unverdi: The recent rise in prices, especially for fuel oil, will add additional pressure on the production and logistics costs of our industrialists, and this will also increase product prices. Unfortunately, it is possible that these price spikes, which will also provoke inflationary risks, will cause the market to stagnate.
Orkhan Aydin, President of ASCON: “Increasing the SCT works in all sectors, and the increase also harms the fight against inflation. After the pre-election economy and the earthquake, tax increases were expected. Since the latest SCT increases will have a direct impact on the transport sector, this will have an increasing impact on almost all sectors. 5 TL and 4 TL per liter should not be underestimated. We will definitely see growth in other products as well. This is a factor that will affect the lower income group.
“We can’t keep the price”
ATB President Shahin Bilgich: “The SCT fuel regulation applies to everyone. Decisions can be made that will ease the economy in our country, but this will directly negatively affect transport, food prices and various needs.”
Tuncay Yildirim, GTO Chairman: “Diesel fuel is not a luxury item… It is one of the main inputs for farmers, tourism companies and many other sectors.”
Ramazan Kaya, TGSD President: “On the contrary, while we expect our work to become easier and spending a little more flexible, our costs are increasing day by day due to increases such as MTV, corporate tax increases and SCT. We have a serious shortage of orders, as we do not match the prices of the countries we compete with and remain above. This leads to a reduction in employment, a reduction in production capacity and exports.”
Ahmet Oksuz, Chairman of İTHİB: Compared to our competitors, our costs have increased. Inbound hikes further increase our costs. For this reason, it is important for the competitiveness of export goods that the exchange rate appreciates in a certain balance so that it does not create inflation. There is a problem in the world, recession in Europe. Shopping began to shift more towards Asia. Our spending must reach a level that can compete with the world.”
“Costs will rise”
Aishem Ulusoy, President of UTIKAD: “This is really a challenge for the transport industry. Unfortunately, this can set off a chain reaction. The effect of the increase in costs will not be limited to the transport sector, the rise in prices for all goods will also affect citizens. ”
Cenk Karache, AOSB President: “Among the forecasts was that in this way the government would cover the damage and budget deficit caused by the earthquake, as well as the current account deficit through taxation. Of course, this has become a factor that will increase inflation, all costs will increase.”
NOSAB President Erol Gülmez: “During the year leading up to the elections, exchange rates were suppressed. As exporters, we have complained a lot about this problem. After that, exchange rates began to rise slightly. However, raising the minimum wage, raising taxes, increasing SCT, and now an increase related to fuel, will again cause production costs to rise. ”
Omer Farouk Korun, President of HOSAB: “This will naturally have a negative impact on the industry. As costs rise, this will also cause an overall decrease in demand. An urgent plan of action needs to be developed on exchange rates, available access to finance and incentives to keep the industry competitive.”
Sibel Zorlu, President of ESİAD: The increase in taxes and the new rules did not come as a big surprise to us. However, we believe that serious additional measures are needed to ensure fiscal discipline and a balanced budget. This increase in indirect taxes will lead to higher prices for goods and services. We are concerned that this situation will continue with the risk of high inflation. Inflation must be fought effectively and decisively, supported by structural reforms.”
Kerem Toparlar, Deputy Chairman of ESGİAD: “Türkiye has invested all the loans given during the period of abundance and cheap money into works that do not add value. Since no investments were made during this period in areas such as energy that could bring in foreign exchange or spend a lot of foreign exchange, these surges were forced with the end of the period. However, the trip will not end there. Unfortunately, due to the direct and indirect effects of these costs, we will see unbeatable prices on every product from head to toe.”
“An additional burden will fall on the company”
ETB President Omer Zeidan; “As a result of the recent surge, the SCT for LPG and diesel has moved close to zero. It seems that the state did not want to endure the loss of tax revenue here any longer. If the exchange rate and the price of oil continue to rise, after that, each increase will be added to the price of the pump. This will greatly increase cost-push inflation. ”
Typhoon Kochak, President of MAPESAD: There hasn’t been an increase in SCT for a long time, but we didn’t expect it to be this big, it was a little unexpected. An increase in SCT will create an additional burden on companies. We are concerned about the growth of the informal sector due to tax increases.”
Head of ARMATURE Gokhan Turhan: “For now, it is important to extend the tax to the base and prevent the informal economy. We need to fight informality.”
KASAD President Alikan Duran: “We will try to cope, but the rain of raises really overlaps. The rest of 2023 will not be easy. Already in the first half of the year, there were some dire consequences such as a recession, an increase in SCT, EYT and a 34 percent increase in the minimum wage. I hope that some other financial projects that will give life to the industry will be considered during their implementation.”
Koray Kaliskan, Chairman of MODOKO: “Of course, the increase in fuel will have a negative impact on our costs. If we can turn the disadvantage we face in exports into an advantage with the exchange rate in the coming period, we can cover rising costs.
ARC Log CEO Fahrettin Arabadji: “Exports have been slowing down since November. There is no situation reflecting increased costs due to low exports. We cannot reflect this on our clients. Foreign shippers prevent us from raising prices with their low prices. The exporter is unable to cancel the increase. Exports have fallen. Cars of transport workers lie in garages. Prices have dropped a lot. We cannot compete. Tough time, obviously.”
No municipality can resist these costs.
Mayor of Eskisehir Metropolitan Municipality Yilmaz BuyukershenIn a statement after the decision “As a result of rising fuel prices, especially rising exchange rates, as well as increasing staff costs, our public transport costs have skyrocketed. There is no side A or side B in this business. No municipality can resist these costs. Taking into account our middle- and low-income citizens who do not have a vehicle, and our citizens who have a vehicle and think twice before getting into it, local governments should be exempt from UST in public transport. used his words.
Raises the risk of recession and inflation
Erdal Bakhcivan, Chairman of the Board of the Istanbul Chamber of Industry (ISO), praised the growth of SCT on his social media account.
ICI President Erdal Bakhchivan made the following statement: “Memory recipes inherited from the past can expose economic life to unexpected situations. Understanding the difficult situation with public finances; We see that rising prices and higher taxes that will gradually challenge the competitiveness, value and financial strength of our industry will increase the risks of recession and inflation in the coming days.”
The producer must be supported by effective subsidies
ITB President Ishinsu Kestelli gave the following assessment: “Diesel fuel is one of the most basic elements of production costs in this area. Machines for the whole process from planting to harvest; They also need fuel for their work. Diesel also plays a leading role in the collection and delivery of the product to the end user.
For this reason, each increase in fuel products is reflected for the producer as an increase in cost, and for the consumer as an increase. The most effective way to prevent this is to support the producer with effective and correct subsidies. Otherwise, it will not be possible to prevent the return of the growth in prices for fuel and lubricants to the upward trend of inflation.”
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