Turkey Proposes Bill to Increase Minimum Civil Servant Salary to 22,000 TL and Introduce Additional Taxes for Earthquake Relief

Turkey Proposes Bill to Increase Minimum Civil Servant Salary to 22,000 TL and Introduce Additional Taxes for Earthquake Relief

Turkey’s proposed bill aims to raise the minimum civil servant salary to 22,000 TL and implement additional taxes for earthquake relief. Find out more about the measures presented in this comprehensive legislation.

The Justice and Development Party (AKP) has submitted a comprehensive bill to the Presidency of the Turkish Grand National Assembly (TBMM) proposing an increase in the minimum civil servant salary to 22,000 TL starting in July. 

The bill also includes additional taxes for earthquake relief.

Details of the Proposed Law

The bill, presented by AKP Member of Parliament Nilgün Ök from Denizli, was explained by Group Chairman Abdullah Güler. 

According to Güler, the approved regulation raises the minimum civil servant salary to 22,000 TL, while the average civil servant salary is set at 25,015 TL. 

He also mentioned that the minimum wage has been increased to 11,402 TL, and the employer’s minimum wage support will continue at 500 TL. 

However, the bill does not contain any provisions regarding the salaries of workers and self-employed retirees, which will be considered in the future based on the current distribution and inflation rates.

Earthquake Relief and Tax Amendments

The bill introduces several measures for earthquake relief, including raising the motor vehicle tax by two-fold for 2023 to compensate for the damages caused by earthquakes centered in Kahramanmaraş. 

Furthermore, the general corporate tax rate 2023 is increased from 20% to 25%. For banks, financial leasing, factoring, electronic payment companies, capital market institutions, and insurance companies, the rate is raised to 30%.

Increased Authority for the President

The President will be authorized to increase penalties prescribed in the Environmental Law up to twice the current amounts.

Changes in Property Sales and Taxation

The exemption for property transfers and deliveries resulting from the sale of immovable properties owned by institutions for at least two full years is abolished. 

However, the exemption for non-traded subsidiary shares in assets will continue. Additionally, the current 50% exemption rate for selling immovable properties owned by institutions is reduced to 25%.

Amendments to Public Financing and Debt Management

The net borrowing limit defined in the Law on Public Financing and Debt Management will be three times the net amount increased by the Minister and the President.

Automatic Fuel Tax Increase

The bill enables automatic increases in the Excise Tax levied on fuels and natural gas. 

Accordingly, the Excise Tax for products containing fuels and natural gas will rise by the amount determined by the 6-month domestic producer price index.

Changes to Tax Exemptions

Tax exemptions for income derived from investment funds and corporate tax exemptions for gains from property sales are repealed. 

However, the corporate tax rate for export profits will be reduced by 5% to incentivize exports.

COVID-19 Penalties and Currency Protection

Fines imposed on individuals who fail to comply with COVID-19 measures will be waived, and those who have already paid the fines will be refunded. 

Additionally, temporary provisions regarding the Currency Protected Deposit (CPD) program will be transferred to the Central Bank of Turkey, which will take over the support previously provided by the Ministry of Treasury and Finance.

Conclusion

The comprehensive bill proposed by the AKP introduces various measures, including raising the minimum civil servant salary and implementing additional taxes for earthquake relief. 

These changes aim to address civil servants’ financial challenges and support recovery efforts from recent earthquakes. 

The bill also includes amendments to tax rates, penalties, and exemptions, reflecting the government’s efforts to enhance fiscal stability and incentivize key sectors.

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