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Premier announces new stimulus package to revive industry
05 Jun '09
2 min read
Under the strain of the slow down caused due to the recessionary trends blowing in the global markets, the Premier of Turkey, Mr Recep Tayyip Erdogan has announced a stimulus package to revive the industrial sector.
The stimulus package which amounts to over Lira 1 billion and to be spent over the next two years has come after the industry clamoured for more incentives in a bid to survive the storm gathering over different industries.
Among the incentives announced include a reduction in corporate tax as per the regions in which the industry is located. Recently the government had recently divided regions based on their economic development.
The most developed region will attract a corporate tax of 10 percent, down from 20 percent and the least developed region will attract a corporate tax of only 2 percent, but will be applicable for investments made before end of 2010.
Companies would be exempt from the social security employment premium they usually have to pay for their new employees for two to seven years depending on the region they invest in.
The investors in areas from the first category will be exempt from Social Security Institution (SGK) premiums for the next two years while those who invest in areas in the second, third and fourth categories will benefit from the package for three, five and seven years respectively.
The government would also extend support to enterprises who intend to move their production bases from locations in first or second category regions to locations in the third or fourth regions in a bid to minimize regional prosperity differences.
Centering on this, the treasury will pay the SGK premiums of the companies from the textile, ready-wear and leather sectors that move to the less developed regions before the end of 2010 and employ at least 50 employees for the next five years.
The corporate tax for these firms will also be reduced to 5 percent and the government will also meet the costs of transportation for these companies.
The stimulus package which amounts to over Lira 1 billion and to be spent over the next two years has come after the industry clamoured for more incentives in a bid to survive the storm gathering over different industries.
Among the incentives announced include a reduction in corporate tax as per the regions in which the industry is located. Recently the government had recently divided regions based on their economic development.
The most developed region will attract a corporate tax of 10 percent, down from 20 percent and the least developed region will attract a corporate tax of only 2 percent, but will be applicable for investments made before end of 2010.
Companies would be exempt from the social security employment premium they usually have to pay for their new employees for two to seven years depending on the region they invest in.
The investors in areas from the first category will be exempt from Social Security Institution (SGK) premiums for the next two years while those who invest in areas in the second, third and fourth categories will benefit from the package for three, five and seven years respectively.
The government would also extend support to enterprises who intend to move their production bases from locations in first or second category regions to locations in the third or fourth regions in a bid to minimize regional prosperity differences.
Centering on this, the treasury will pay the SGK premiums of the companies from the textile, ready-wear and leather sectors that move to the less developed regions before the end of 2010 and employ at least 50 employees for the next five years.
The corporate tax for these firms will also be reduced to 5 percent and the government will also meet the costs of transportation for these companies.
Fibre2fashion News Desk - India
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