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Erdoğan promises single-digit inflation, tax exemptions in new economic reform plan

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Turkish President Recep Tayyip Erdoğan pledged to focus efforts to improve Turkey’s economy on bringing inflation down to single digits and introducing tax exemptions for low-income tradespeople as part of an economic reform package he unveiled on Friday.

“We will be exempting nearly 850,000 tradespeople who are subject to small business taxation rules, such as hairdressers, plumbers, carpenters, tea shop operators, tailors, and repairmen, from income tax, and we will remove their tax filing obligations,” the president said in a televised speech in İstanbul.

The program mainly aims to boost economic growth in Turkey on a sustainable basis, create jobs, increase exports and reduce the country’s reliance on imports, Erdoğan added.

The president said an “early warning system” was being developed to help slow food prices, which have climbed sharply in recent months, in addition to the efforts to create an economic, technological and legal infrastructure for digital currency.

“We have also included the tax problems faced by international investors within the reforms,” Erdoğan also stated, explaining that tax policies will be simplified in line with the comments of representatives from the private sector and nongovernmental organizations whom they consulted with while drafting the package.

Erdoğan further promised to help small businesses hiring additional employees by offering them state-backed loans of TL 100,000 ($13,225) with a six-month grace period for repayment, underlining that the government would also encourage companies to employ more women and young people by providing financial incentives.

The structural reforms will include making the Turkish Statistical Institute (TurkStat) independent, Erdoğan highlighted. “The government will reduce the number of extra-budgetary funds or merge them into the main budget to improve transparency,” he said.

Savings in public administration, such as limiting vehicle rentals and hospitality costs, will be expanded, the president promised. “In addition to the central government, we aim to create a thrifty perspective in local administrations as well,” he added.

Opposition figures and critics have called into question Erdoğan’s promise of reforms in Turkey’s economy, which have become a recurring theme in his speeches since the sudden reshuffle of the country’s top economic team, including the resignation of Berat Albayrak, the finance minister and also Erdoğan’s son-in-law, on November 8.

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