Key points from Vice President Cevdet Yilmaz’s remarks include:
Will Turkiye be removed from the grey list?
Mehmet, you are in Singapore. We have been on the grey list for a while. We will be evaluated at this General Assembly tomorrow. There will be a vote. Technical studies have been done. All the arrangements requested of us have been completed. The technical group of the working group arrived within the last few months. They have carried out on-site inspections. We know that there are positive reports. Our expectation is that positive steps will be taken. Meanwhile, each country will vote. They sometimes interpret consensus. I believe that a positive decision will be made tomorrow. If there is no positive decision, I will let you interpret it as a political decision. There are no technical issues. Thank you, Congress. Not dating is not the end of the world. It is your practice that matters. Of course, being on the grey list is not a favorable situation. This is not a grade increase, but it can have a positive effect. It is an important event that will affect the perception of the country.
“Annual inflation will decline from June.”
There may also be a flow of funds to Turkey under more favorable conditions. This will help the development of our country. Here, regulations against money laundering and terrorist financing are more important than economic policies. There were important regulations passed by our parliament. Turkey has no shortage of legal regulations. The fact that some countries are blocking it for political reasons shows that Turkey is playing its role through the communication we propose and that the decision was made for political reasons. We came up with a medium-term plan last year. We divided it into three parts. Three periods on inflation were discussed. We consider the transition period to be completed in May. We said that May will be the most and that it will decrease from May onwards. The annual inflation rate will decrease from June. We consider that in June we will enter a disinflationary period. You will see that it has decreased quite a bit in September. The central bank expects growth to be 38% at the end of the year. We are taking that as our basis. We expect it to be below 20% next year. We believe that in 2026 we will reach single-digit figures and that permanent price stability will be ensured. Our experts have seen these. The public still has high expectations. They need to see something concrete. I think this perception will crumble over the summer. We believe this. As the AK Party and the People’s Alliance, whatever the concerns of the people, this is our number one priority. Our main priority is to control inflation.
“The most unfair tax is an inflationary tax”
We are going through difficult times for the world and for us. We have wars in our region. We also have the biggest disaster in our history, the earthquake. The amount allocated by the central government this year is 1.3 trillion TL. We will aim for a better environment in the next period. You cannot achieve lasting prosperity in an inflationary environment. If you control inflation, you have the opportunity to easily adjust income distribution and achieve lasting prosperity. We are a developing country. The most unfair tax is the inflation tax. We do not want inflationary tax increases. Growth is good. We have had the best growth in the world. It was also said that the budget deficit would increase to 10%. The real figure was 5.2. If you subtract the earthquake costs, it is 1.6. We are making disciplined moves with the budget. The current account deficit in 2023 was about 4. These are figures compared to the national income. We are doing well from the OVP. The current target is around 2.5. Unemployment has fallen to historic levels. Exports have exceeded $260 billion in 12 months. Our target in the tourism sector is $60 billion. Turkiye continues to make a healthy progress. Current reserves are $147.6 billion. Excluding swaps, we have a profit of nearly $13 billion. I would say that we are seeing a significant improvement. The need for foreign currency has decreased. KKM’s assets last year were $126 billion. The final figure fell to $62.5 billion. CDS fell to 281 out of 700. We have reduced our risks. Of course, we must never let our guard down. We need to continue this trend resolutely. We will look at this issue from all angles. We need to see it only as a monetary policy. We also have the 12th Development Program. Some are trying to create a pessimistic atmosphere. They are using the atmosphere created by the pandemic and the war to create the perception that we have gone back 21 years. In 2002, our per capita income was 38 percent of the EU Turkiye average. In 2023, we will be 73 years old. Hopefully, in the Turkiye century we will see figures that exceed several hundred percent.
Determination of Conflict of Interest
Monetary Policy Committee assessment. He reiterated the need to identify a persistent downward trend. Vehicle independence. Policy will be determined within the framework of the independence of the central bank’s monetary instruments. If the inflation trend breaks down, the central bank’s assessment will be carried out in the most sound manner.
Is there justice in taxation?
This is our goal, to increase tax fairness. In all the consultations we held that day, there was an expectation to increase tax fairness. We followed common sense and made this part of the OVP. We continue these studies even at the current stage. Technical studies are continuing. We have a mature work in stock. It will be politically evaluated. If it is submitted as a proposal to our Parliament, the rest is at the discretion of our Parliament. Direct taxes are taxes on earned income. Indirect taxes are taxes on consumption. In direct taxes, you pay the same tax regardless of your income level. It creates inequity. You collect taxes directly from elected officials. It creates different social effects. We have a high rate of indirect taxes, but we did it in the following way. We got a high rate for luxury goods, but with direct data, we have the opportunity to achieve this more easily. Our goal now is to increase direct taxes. Meanwhile, we increase social justice. The public borrows less resources from the market. We will continue our efforts to increase tax fairness.
Taxes and other charges from waiter tips
It is not included in the draft currently being worked on. It was previously proposed that payments made by card should be recorded on the receipt. There is no such thing in our current study. These are issues used to create confusion in some societies. Ministries are always conducting technical studies. They produce alternatives. These will remain just kitchen studies until they are presented to Parliament without an impact assessment. The debates before coming to Parliament will remain in comments. My advice to the public is not to rely on what you hear from competent persons or institutions. There are no exact dates for the work yet. We aim to leave it to Parliament’s discretion before the recess.
Overseas departure fee
Under construction. Let’s see the results together. Reasonable prices. There are some exceptions to the rules for social considerations.
Claims of a 20 percent tax on rent
There are currently no such studies. Our main framework is clear. We are sensitive to broad segments of society. We want to have no or minimal side effects on inflation.
“You can’t save the salary you pay to your executives.”
We work in different dimensions. Some expenses are inflexible. We cannot save from the salaries we pay to civil servants. A delicate study has been done on the flexible pen. What our President has emphasized recently is very important. We are making progress. We have mentioned savings and efficiency in this package. We have focused on certain areas. We have prioritized irrigation investments. We have focused on logistics. Railways is our priority area. We also see the field of informatics as a priority. We will know what the fiscal deficit will be in September when the full results of the medium-term plan are revised. We expect the fiscal deficit to be around 5.2 from 6.4. We expect to end with a figure below the projected fiscal deficit. A circular has been issued. We are working on developing the legal regulations that will be required. Once completed, it will be at the discretion of the parliament. One of the most important issues in the current savings and efficiency package is the monitoring system. We believe in your good intentions, but a system needs to be established. Every state has rules and requirements that must be followed in certain positions. There are no expectations beyond that. Efforts are being made to improve governance in the public sector. We call it kit management. On the other hand, members of multiple boards of directors must receive their salaries from a single source. This needs to be limited. They receive their salaries from the board of directors, but there are rules about receiving multiple salaries. Secondly, the limit should not be exceeded, and the excess should be recorded as income in the budget. We were implementing it in principle, but there were some omissions. This regulation will put us ahead of them.
Early election debate
Four years without elections is a good time for Turkiye. If elections were held, countries could get caught up in short-term problems. Turkiye has had such an opportunity for a long time. We cannot allow that. I think the main opposition leader said this in consideration of the internal party discussions from his support base. I don’t think there is any justification for early elections. I think having such discussions is a reflection of internal conflicts in the party. He initially said there was no need for such a thing.
Mehmed Simsek’s visit and statement
I consider dialogue in politics to be a positive thing. We have always supported this. We are a democratic country, so it is not good for political parties to be the same. Parties that work on the fight against terrorism in domestic issues, or on constructive politics in foreign issues, must be able to unite. A completely populist approach. Everyone needs to be careful about the language they use. Method and style take precedence over content. I was sad to see that scene. I wish they had evaluated the environment with a different content. The remarks on the second day that incited discord against the People’s Alliance are not pleasant. We will continue to walk strong. It must be sincere. Let me give you an example of commissioned work. Sometimes the opposition comes and submits motions, makes calls, and does things knowingly without any context to the committee discussions, and sometimes they make propaganda saying, “I did it and the government refused.” This is a strong country. I would like to express my expectation of higher quality politics from the opposition. Once the trend of economic indicators becomes clear, we will see that populist discourse is over. Let’s not fall into the trap of populism.
